Yesterday, the Nasdaq Composite had a positive day following the release of two key economic reports. The US ISM Services PMI beat expectations with the services sector holding on in expansion while the US Job Openings fell much more than expected. Overall, it was a good day for the soft-landing fans as the drop in Job Openings shows that the labour market is softening via less jobs rather than more layoffs, which is good news for inflation and growth. Such downtrends in job openings though happen around the turns in the cycles which are eventually followed by recessions. We will see if this time is indeed different…
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite pulled back into the red 21 moving average where we got a bounce as the buyers stepped in. Was this the best we could get as a pullback? Time will tell, but at the moment the buyers are still in control as we need other key breaks to the downside to turn the bias more bearish.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price has been diverging with the MACD into the cycle high. This is generally a sign of weakening momentum often followed by pullbacks or reversals. We got a pullback recently with the buyers stepping in already around the lows of the divergent formation and the daily 21 moving average. From a risk management perspective though, the buyers would have a much better risk to reward setup at the 13700 support where we can also find the 38.2% Fibonacci retracement level of the entire rally.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price recently rallied into the minor counter-trendline where the price got rejected as the sellers continue to pile in around these levels targeting a bigger correction. The buyers will want to see the price breaking higher to increase the bullish bets into the cycle high and targeting a breakout.
Upcoming Events
Today we have another US labour market report with the release of the US ADP data. Tomorrow, it will be the time for the US Jobless Claims figures, while on Friday we conclude the week with the NFP report.
