Last Friday, the Nasdaq Composite pulled back as a hot US PPI report weighed on the market. In fact, the Treasury yields rose, and the rate cuts expectations got trimmed some more as fears of stickier inflation started to creeping in. The Fed members though keep on dismissing the latest figures as something expected and continue to repeat that the disinflationary trend remains intact. This suggests that the Fed is not even considering rate hikes and in the worst-case scenario could just delay rate cuts. The market might continue to like this as long as the economic data remains good. Today the market will be closed for the Presidents Day and will resume trading tomorrow.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite last Friday fell into the close following a hot US PPI report. The price is now near the key trendline so we can expect a retest where the buyers will look to buy into the dip to position for a rally into the all-time high. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and position for a drop into the 15150 support.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that besides the trendline we have also the confluence with the 50% Fibonacci retracement level and the previous resistance now turned support. What happens around this level will likely define where the market will go in the next few weeks.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the recent price action with the key support zone around the trendline marked by the green box. This gives us a pretty textbook trading setup with the buyers looking for a bounce and a rally into the all-time high, and the sellers looking for a break and a drop into the next support at 15150.
Upcoming Events
This week is basically empty on the data front with just the release of the FOMC Meeting Minutes on Wednesday followed by the US Jobless Claims and the US PMIs on Thursday.
