The market continues to march higher as the war in Israel hasn't spread to other Arab countries. In fact, yesterday the US intelligence has even reported that Iran was surprised by the Hamas attack. This has weighed on Crude Oil prices and eliminated the risk of a much bigger spike. Moreover, the US PPI report yesterday beat expectations, but it was mainly energy driven and the market brushed it aside as we got a big drop in Oil prices in October and even Fed's Waller sounded like a rate hike in November is not coming unless we get a very ugly CPI report.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that after the breakout of the consolidation around the key 13174 support, the Nasdaq Composite surged to new highs and continues to rally with almost no pullback towards the top trendline around the 13800 level. That’s where we can expect the sellers to step in with more conviction and a better risk to reward setup to position for a drop into the lows and targeting a break below the 13174 support.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is struggling a bit at the resistance around the 13650 level. A break above it should see more buyers piling in and extending the rally into the top trendline. The sellers, on the other hand, should keep on leaning on this level with a defined risk above it to position for a drop into the lows.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the key levels for this rally and how the break of those barriers led to more and more bullish pressure as the buyers increased the longs into the top trendline. If we get a pullback from the current resistance, the buyers should lean on the broken trendline and the support around the 13500 level to position for another rally into the highs. The sellers, on the other hand, will want to see the price breaking below the 13500 support to increase the bearish momentum and target a break below the 13174 support, especially if the CPI report today surprises to the upside.
Upcoming Events
Today we will get the most important report of the week, that is the US CPI report. The market is likely to focus on the core measures and react positively to lower than 0.4% monthly rate readings. At the same time, we will also see the latest US Jobless Claims data which is an important labour market report. Tomorrow, we conclude the week with the University of Michigan Consumer Sentiment report.
