The tensions in the Middle East have risen on late Tuesday as a rocket hit a hospital in Gaza killing hundreds of people and sparking a global outrage. As a consequence, Jordan cancelled the summit that was scheduled between the US President Biden, the Palestinian President Abbas and the Egyptian President al-Sisi in Amman.
On a domestic side, the strong US Retail Sales data was followed by a rally in Treasury yields with the 10yr approaching 5.00%. This tightening in financial conditions might be weighing on the stock market, especially in this part of the cycle when the past rate hikes should start to feed through the economy faster.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite is breaking through the upward trendline again which might be an ominous sign for the buyers. The target for the sellers should now be the support level around the 13174 level where the buyers are likely to step in with a defined risk below the level to position for another rally into the downward trendline.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more closely the breakout of the key support around the 13362 level where we had the confluence with the previous resistance turned support, the 50% Fibonacci retracement level, the red 21 moving average and the major upward trendline. A further break below the 13174 support will give the sellers much more control and we will likely see a drop into the 12274 level.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that this might just turn into a complex pullback with the price bouncing on the lower bound of the channel and then breaking to the upside confirming the bullish flag pattern. Anyway, the buyers should pile in around the 13174 support to target the break above the 13362 resistance and eventually a rally into the major downward trendline around the 13800 level.
Upcoming Events
Today we will get the latest US Jobless Claims data and it will be interesting to see if the miss in Continuing Claims last week was just a blip or the start of a trend. Later in the day we will also hear from Fed Chair Powell where the market will be focused on any hint about the near-term policy outlook.
