Yesterday, the Nasdaq Composite continued to retreat from the highs as the market is waiting for the key catalysts in the next few days and weeks. Nothing has changed in the bigger picture as the Fed is still considering rate cuts conditional on the disinflationary trend being intact. The data has been good but what will matter the most is the next CPI report as that will tell us if the progress on inflation has indeed stalled, or worse, reversed. Before that we will get many important reports including the NFP, but as long as they remain benign the market will likely keep on rising.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite has now reached the key support zone around the trendline where we can also find the blue 8 moving average for confluence. This is where the buyers we can expect the buyers to step in with a defined risk below the trendline to position for a rally into a new 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 the price has been diverging with the MACD for a long time. This is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, we got the pullback into the trendline where we will likely see a strong reaction. We can also notice that we might have formed a rising wedge right at the all-time high. It will be important for the buyers to break out into new highs as a break lower could trigger a selloff into the base of the wedge at 14477.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the support zone around the 15900 level where we can also find the 38.2% Fibonacci retracement level for further confluence. What happens here will likely decide where the market will go in the next few weeks with a strong bounce leading to new highs and a break lower triggering a selloff into new lows.
Upcoming Events
Today we will see the US PCE and the latest US Jobless Claims figures, while tomorrow we conclude the week with the US ISM Manufacturing PMI.
