Tech Weakness Drags Futures Down After Brief Wall Street Rally

U.S. stock index futures fell on Tuesday evening, with the S&P 500 down 0.4%, Nasdaq 100 down 0.5%, and Dow Jones down 0.2%. The drop followed a brief recovery in Wall Street indexes. Weakness in technology stocks persisted due to disappointing earnings from Super Micro Computer Inc., which fell nearly 13% in aftermarket trading. This sparked broader tech stock declines, affecting companies like NVIDIA (-2.3%) and AMD (-1%).

Wall Street had earlier recovered some losses, with the S&P 500 and NASDAQ Composite each rising 1%, and the Dow Jones up 0.8%, amid hopes of lower future interest rates due to worsening economic conditions. Despite the recent gains, investor sentiment remains fragile. Upcoming key earnings, including from Walt Disney, are being closely watched.

Investors are cautious about further investments in high-valued stocks like Microsoft (MSFT), amidst overall market uncertainties and economic slowdown concerns.

Smart Money Indicators

Taking a look at the COT Data we can see big institutions are starting to let go of their short positions. Reflecting the recent increase in price. Over all position sizing is pretty neutral. With the Russel leaning bearish & the dow jones leaning bullish. All 4 indices showed a positive net change again confirming potential upside. From this reading in full, we can expect the Russel to make a low, while sister asserts fail too, signaling bullish SMT.

For the non commercial vs retail positioning we're just going to focus on s&p500 as it is considered the overall performance of the stock market compared to sister assets. We can see since August 1st non commercial has increased their net positions slightly while retail significantly changed to a bearish positioning. Further confirming a potential move to the upside.

Viewing all the retail positioning across indices we can see primary bullishness in most indices. Giving us a pretty neutral reading on retail, with s&p being the main indicator & leaning bearish.

We recently went over the put-call ratio when we reviewed the US dollars a few days ago, bearish sentiment has climbed even further since then with an increase in puts. now when things are overly one sided they reverse remember.

Looking at seasonalities, again we get a reading for some upside. Services PMI Monday gave a better forecast than expected, showing its not all down & out for the economy just yet. Investors look to Thursdays unemployment claims for more data.

Again we can't make this up with our final indicator, interest to see how quick sentiments change, certainly it has been reflected in this volatile market. Since reviewing the US economy a few days ago where the the gauge was in fear over 30% with a risk off environment (reflecting in gold prices) the market is back In greed with a risk on environment.

The Technicals

On the monthly we actually have bullish SMT, it's pretty early in the month so there is no telling, but with rate cuts expected in September, have we found a bottom for the month? That or we can expect a heavy further drop from dow jones. https://www.tradingview.com/x/mI96Wutf/

On the weekly you can see the significant upside from the bottom & the SMT is a lot more clear with nasdaq being the only way to go that low in structure. https://www.tradingview.com/x/KHrS4JMh/

On the daily, the gaps are very clear where price filled & reversed https://www.tradingview.com/x/3EbqGRWC/

On the 4hr there is a clear possible reversal point to the downside on nasdaq & even left a potential 1:3 RR idea. If this zone is met with strong bullishness that's a confirmation for me the low of the month is in. Now with the volatility of this month already no matter how deep price is in any direction we don't know what can happen. And technically the indices are definitely super bearish. The range created Wednesday I'm expecting to form an important trajectory for the coming weeks as price reacts to this range. https://www.tradingview.com/x/6iYlYvSM/