Nasdaq Composite: Bearish bias confirmed with inflation

(News Bulletin 247) – The rise in yields on 10-year government bonds (Treasuries 10 yrs), which are again flirting with 3%, will continue to weigh on the Nasdaq Composite index, rich in growth stocks (Growth), the day after the publication of even more galloping inflation than expected.

In detail, prices gained monthly (month on month) 1.3% in June, against 1.0% in May. Excluding food and energy (volatile elements), prices increased by 0.7% in June, against +0.6% in May. Over the past 12 months, prices, in their broadest sense, have jumped 9.1%. What drastically reduce the probabilities of a 50 bp hike in the Fed Funds at the end of the month, to the benefit of the probabilities of a new tightening of the screw by 75 bps.

To follow as a priority on the statistical agenda this Thursday, the producer price index in the United States at 2:30 p.m. The program tomorrow will be even busier with major statistics, likely to cause delays: retail sales, and consumer sentiment (U-Mich) for the sacrosanct domestic consumption, and the monthly report on industry and the barometer Empire State manufacturing for the secondary sector of the world’s largest economy, whose probabilities of going through recession at the turn of 2023 are increasing.

On the value side, Twitter regained 7.90% to $ 36.75, returning to its price levels last Friday, after the announcement by the board of directors to sue Elon Musk, following the abandonment by the businessman about his purchase project.

KEY GRAPHIC ELEMENTS

The technical board backdrop remains bright red.

The flagship index of technology stocks of the American dimension is still in a downward phase, tracing a chartist pattern with an oblique neck line, within a corridor with a bearish bias. The pattern remains heavily bearish within the channel. The next highly psychological threshold is at 10,000 points. Negative opinion immediately.

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 11460.00 points.

CHART IN DAILY DATA

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