The Nasdaq 100 Index has been influenced by traders adjusting their positions in anticipation of the upcoming Consumer Price Index (CPI) report. The latest CFTC Commitments of Traders report indicates a significant shift in speculative futures positioning, with aggressive selling of SOFR futures contracts, suggesting expectations of higher short-term interest rates. This anticipation of a notable CPI figure has also led to an increase in aggregate dollar longs, reflecting a strong expectation of a strengthening USD. In the equities market, a mixed approach is evident, with buying activity in SPX futures indicating bullish sentiment, while selling of NDX contracts suggests varying expectations about index performance. This divergence may be influenced by sector-specific factors or broader economic indicators, with short-covering in the VIX pointing to diminishing expectations for market volatility.
The ProShares UltraPro Short QQQ ETF (SQQQ) experienced a decline, dropping 4.63% to $29.27 as of 16:20 on Friday, January 17.