Fundamental Overview
The Nasdaq recovered all the losses as the de-escalation that ensued soon after Trump’s threat of massively increasing tariffs on China gave the bulls a good reason to keep piling into the market.
The baseline expectation is for US and China to reach some kind of a deal before the November 1st deadline. If that doesn’t happen, then we can expect the deadline to be postponed keeping the negotiations going.
Everybody knows that 155% tariffs on China would be a suicide for both, so it’s kind of an empty threat. Nevertheless, we could still see the markets selling off in case things go south and Trump decides to impose those tariffs. It’s a very low risk, but still a risk.
On Friday, the BLS will release the US CPI report despite the shutdown since it’s crucial for social security benefits adjustment required by November. The data won’t stop the Fed from cutting rates in October, but it could trigger a hawkish repricing in case we get an upside surprise.
Nasdaq Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq erased all the losses and it’s now trading near the all-time high. This is where we can expect the sellers to step in with a defined risk above the all-time high to position for a drop into the major trendline. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into new highs.
Nasdaq Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a key support zone around the 25,200 level. That’s where we can expect the buyers to step in with a defined risk below the support to position for a rally into new all-time highs. The sellers, on the other hand, will look for a break lower to increase the bearish bets into the trendline around the 24,700 level.
Nasdaq Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more clearly the consolidation between the all-time high and the 25,200 support. There’s not much else we can add here as the buyers will look for bounces around the support, while the sellers will target a breakout. The red lines define the average daily range for today.
Upcoming Catalysts
On Friday, we will get the US CPI report and the US flash PMIs.
