Markets

Nasdaq Composite: No reliable foothold in rebound attempt

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(News Bulletin 247) – The dynamics of future on the index bodes well for an opening in balance on the Nasdaq Composite, in a market that is struggling to guess the degree of aggressiveness of the Fed for the coming months. If inflation remains at very firm levels, the question remains whether the peak is behind us. A few signs of appeasement, particularly on the front of real estate sales volumes, relieved the rating somewhat. But the eyes will remain riveted in this second part of the week on the statistics concerning employment. One of the Fed’s worst fears is naturally the specter of entering a price/wage loop. As such, the federal report on US employment (NFP) will be scrutinized tomorrow.

In the meantime, the benchmark on employment comes from the results of the survey of the private firm in human resources (ADP), which have just been published. Excluding the agricultural sector, the American economy would have created only 128,000 jobs in May, well below expectations. Separately, new weekly jobless claims for week 21 were 200,000, according to the latest Labor Department figures, down 11,000 units.

Emmanuel Auboyneau, Managing Partner at AMPLEGEST, sheds the following light: “On the more structural part of inflation, which currently mainly concerns the United States, we have noticed a slight deceleration in wages over the past three months. This is a good new but this variable must be monitored because the lack of labor could force companies to resume their movement to increase wages.

KEY GRAPHIC ELEMENTS

The thin trading range that we identified between 13,330 and 13,838 points was broken under conditions of volumes, volatility, and very significant candles. The marubozu plotted on Thursday 04/21 shows in particular a mobilization of the selling side throughout the session, until a close almost exactly on the low points, opening the way to a bearish target CT at 12,640 points. The latter was broken, after a very nervous hesitation in the second part of week 17. The warnings then came on and have not gone out definitively since. the harami envisaged on Monday has not been validated, and the relatively large candle, by its lower shadow, can serve as a framework for the start of a short-term bearish inflection. The reintegration of the lower part of the 20-day moving average (in dark blue), not yet relevant, would bring a clear bearish message.

FORECAST

Considering the key chart factors we have mentioned, our opinion is negative on the Nasdaq Composite index in the short term.

This bearish scenario is valid as long as the Nasdaq Composite index is trading below the resistance at 12140.00 points.

CHART IN DAILY DATA

©2022 News Bulletin 247

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