(News Bulletin 247) – The rise in 10-year government bond yields (Treasuries 10 years) is challenging for the Nasdaq Composite index, densely represented in growth records. The short rebound attempted during the session yesterday failed to bring the index back into green territory at the close (-0.26%) unlike the S&P500. The ebb is now more than 10% since the high points of August, reached on the formation of a star doji of school. Combined with the previous candle, we even identify a harami crossed.
Yesterday on a statistical level, operators took note of a barometer of activity in industry (PMI ISM) slightly beyond expectations for the month of August, at 52.8 points, or 2.8 points above the bar which separates, by construction, a contraction from an expansion of the sector considered. In addition, new registrations for unemployment benefits across the Atlantic amounted to 232,000, with no big difference compared to the previous week. There is more talk of employment this Friday with the publication of the monthly federal report for August. Report eagerly awaited by the market. Let’s break down the main elements.
It is rather reassuring, in the sense that it shows persistent tensions, but a little less strong than anticipated by the market. The unemployment rate rose slightly to +3.7% of the active population, which remains close to full employment, but augurs well for a larger labor pool. Hourly wages (+0.3%) are not slipping, even slowing their rate of increase, and job creations in the private sector (excluding agriculture) exceed expectations at 315,000 creations.
On the value side, NVIDIA lost nearly 8% yesterday in powerful volumes, after the US administration banned the export to China of certain high-power computing chips.
KEY GRAPHIC ELEMENTS
On black marubozu, in powerful volumes, the flagship index of technology stocks of the American dimension broke the neck line of a small figure in shoulder, head and shoulders, which signals the definitive end of the bullish leg started on the 17 June. The index broke its 50-day moving average (in orange). The last time this technical event happened (08/04), the clearings accelerated: -23% until June 16, in significant volatility.
Triple peaks are clearly emerging on iconic heavyweights of the index, like Tesla or NVidia. This in itself constitutes an alert. But in the immediate future, a rebalancing of forces after the publication of the NFP is envisaged.
FORECAST
In view of the key chart factors that we have identified, our opinion is neutral on the Nasdaq Composite index in the short term.
We will take care to note that a crossing of 11990.00 points would revive the tension in the purchase. While a break of 11460.00 points would relaunch the selling pressure.
CHART IN DAILY DATA
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