This Week's CoT - Futures, Hedge Fund Buying

The path of least resistance is down in the sessions ahead. There is support at 4080s, and 3980s after that. By that time, the index will have lost a rising trend line from March last year.

Euro: Currently net long 81k, up 159.

Thursday’s high of $1.2137 came close to testing horizontal resistance at $1.2170s. Friday’s low of $1.2003 successfully tested $1.19-$1.20, which was recaptured two weeks ago. This level goes back 18 years.

On the daily, the euro ($1.2019) remains overbought, unwinding of which is likely in the sessions ahead, raising breach risks of $1.19-$1.20.

Gold: Currently net long 170.6k, down 10.9k.

For seven consecutive sessions through Wednesday, GLD (SPDR Gold ETF) saw no activity whatsoever. This comes after cumulative loss of $14.7 billion over 24 of 27 weeks (courtesy of ETF.com). This is encouraging in that it is possible sellers may have exhausted themselves, but gold bugs need inflows at this juncture.

Gold ($1,767.70/ounce) continues to be held down by a falling trend line from August 7 last year when it reached its all-time high of $2,089.20. On Thursday, the metal rose as high as $1,789.90 intraday but only to reverse lower and end the session down 0.3 percent to $1,768.30.

Toward the end of February, horizontal support at $1,760s-$1,770s gave way. The level was retaken mid-April and is once again in play. For the metal to regain momentum, not only does it need to save this support but will also need to reclaim the trend line mentioned earlier.

Nasdaq 100 index (mini): Currently net short 7.8k, up 2.6k.

Tech bulls had to be disappointed with how Thursday traded. After AAPL and FB reported much-better-than-expected March-quarter results on Wednesday, the Nasdaq 100 gapped up 1.2 percent to a new intraday high of 14073.48. In the very first few minutes, sellers took control. By noon, the index was down 0.5 percent to test its 20-day, which held; the session ended up 0.5 percent – above both its 10- and 20-day. Come Friday, it shed 0.8 percent to close right on the 20-day, with rising risks of a potentially bearish cross-down between the averages.

This was a week in which the top six US companies – AAPL, Microsoft (MSFT), Amazon (AMZN), Google owner Alphabet (GOOG/L), Tesla (TSLA) and FB reported. Results exceeded estimates, with some of them hitting it out of the park (more on this here). But the Nasdaq 100 (13860.76) did not get much help.

Bulls should like the fact that April ended up 5.9 percent. But this probably was not enough to negate the prior three monthly ominous looking candles – a dragonfly doji in March, a shooting star in February and a long-legged doji in January.

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