Nasdaq Composite: Oblique Neckline Chartist Pattern

(News Bulletin 247) – Despite a probable opening in green territory, the atmosphere should remain very fresh on the main equity indices across the Atlantic, and especially on the Nasdaq Composite, whose very nature of its composition makes it particularly sensitive to repeated tightening of the screws in the major central banks. The latter “can no longer, as before, come to the rescue and restart the machine in the event of a crisis given the inflationary forces at work (repatriation of production chains, energy transition, changes in the structure of savings) “, as CARMIGNAC’s strategists remind us. “This is a real source of concern because many bubbles have formed in the wake of the support measures taken for several years around the world. However, historically, rate hikes have almost always led to the bursting of bubbles speculation and/or market crises.”

J. Powell is continuing his biannual hearing before parliamentarians. The battle against inflation initiated by the central bank of the United States risks causing a recession in the world’s largest economy, as Jerome Powell, the head of the Fed, has half-acknowledged. The second part of the hearing of the head of the US Federal Reserve is scheduled for Thursday before the House of Representatives. The content of the speech will probably be modeled on that made during the great oral in front of the parliamentarians the day before. Namely that of a strong determination to reduce the inflation of prices.

In terms of statistics, operators have just taken note of new weekly registrations for unemployment benefits, at nearly 230,000 new units, almost perfectly within target. All employment-related statistics are particularly scrutinized at the moment, as the fear of the Fed is the specter of entering a price/wage loop. To follow tomorrow the revised data of the confidence index U-Mich of the confidence of the American consumer.

KEY GRAPHIC ELEMENTS

The working matrix remains unchanged, bearish in spite of the moreover timid reaction yesterday with regard to the initial ebb.

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 hesitantly nervous hesitation on the second part of week 17.

Friday’s closing level off the weekly lows, which we put on watch, brings an additional bearish reading. The very clear price / volume divergence has been unappealing since May 25, was followed by a release of selling energy out of the bottom of a micro-diamond, followed by the formation of two large bearish gaps, the last of which was only partially regained on Wednesday 15.

A fragile oblique railing is put under very close surveillance. We have represented it in black and dotted on the graph below. It frailly supports a pattern chartist, and constitutes its oblique neck line.

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 11244.00 points.

CHART IN DAILY DATA

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