(News Bulletin 247) – The Nasdaq Composite index yesterday lost 1.83% to 15,254 points, under the effect of profit taking triggered by fears around the consequences of the new “Omicron” variant of the Covid-19 coronavirus. The losses were actually “built” in the last part of the session. In the end, a long red candle with a very elongated body, which invites us to think that, although the underlying bullish bias is not threatened at this stage, the entry into the broad and volatile consolidation phase has been recorded. Especially since microeconomic news is able to cause some turmoil for the rest of the week on a number of heavyweights in the sector: according to information from the Bloomberg agency, Apple would have indicated to its suppliers a contraction of the demand for its phone model IPhone 13. We follow in particular Apple naturally, but also AMS, Infineon and ASML. Note that Apple has not communicated on this subject.
The index is expected in the red, but in very reasonable proportions depending on the dynamics of the futures as the opening approaches. The markets remain focused on monetary policy issues, even as the new variant adds an unknown to the equation. But seen with Fed President’s “glasses”, the appearance of this new variant would not ultimately grant the most precious good: time? This is the thesis defended by Jean-Jacques Friedman – Investment Director of VEGA Investment Managers, a subsidiary of Natixis Wealth Management. “If caution is needed in the short term, Omicron is giving back time by allowing J. Powell not to succumb to the pressure of recent statistics and to settle for more aggressive monetary tightening. In fact, investors are forecasting now two key rate hikes by the Fed in 2022, compared to three previously. ” What feed a rebalancing of forces on growth issues, particularly in the technological sector.
Yesterday in terms of statistics, the PMI (ISM) hardly deviated from the target either, at 61.3 for the month of November. In addition, the survey on employment by the human resources firm ADP reported 534,000 job creations in the private sector, excluding agriculture. Verdict tomorrow with the Federal NFP (Non Farm Payrolls) monthly report. In the meantime, the Department of Labor has just published an encouraging statistic on employment with new registrations for unemployment benefits in the order of 220,000 for the past week? Target beaten, therefore.
KEY GRAPHIC ELEMENTS
Regarding the substantive technical framework, at this stage unchanged:
Since October 28 and the registration of new historic highs after those of September 07, the flagship index of technology stocks of the American stock market has systematically closed on the high points of the session, in strong volumes, which contracted only very little . The buying side, fully mobilized, does not raise any questions.
A court terme:
The entry into a phase of digestion, the structure of which will be instructive for the future, should be considered. We are still in the process of defining the framework, and the amplitude, of future consolidation. Wider consolidation is looming. A first bearish acceleration within this consolidation was expressed, Tuesday, and Wednesday, in a larger amplitude but less strong volumes.
Negative opinion on the scale of the only session to come.
PREVISION
In view of the key graphical factors that 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 quotes below resistance at 16212.00 points.
DAILY DATA CHART
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Source: Tradingsat
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