(News Bulletin 247) – The Nasdaq Composite index, the flagship index of technology stocks on the American side, reached yesterday in extremisunlike the broader (S&P500) or generalist (DJI) indices to close in positive territory (+0.25% to 10,829 points), even though the continued rise in Treasuries 10 years leaves little doubt about the general state of market psychology. Certainly the appetite for the files Growth is mechanically thwarted, but the possibility of formation of a rebound of contestation, of a technical type, is real at this stage.
“The question then arises as to when the FOMC will deem the policy restrictive enough,” asks Warren Hylan, Portfolio Manager at Muzinich, who says: “The FOMC’s preferred method of measuring policy restrictiveness is financial conditions indices The magnitude of the added tightening of financial conditions has only occurred on two other occasions: in 2000 and 2007. If history repeats itself, such policy tightening may not be well policy adjustment needs to be aggressive, and is therefore restrictive, which may explain the current market reaction and redemptions in recent weeks.”
A financial conditions index is a barometer measuring the general health of a given financial market.
On the macroeconomic side, there was little to eat yesterday, while waiting for US PCE prices and GDP in final data for the second quarter, in the last part of the week. Note the publication, beyond expectations, at 108, of the consumer confidence index (Conference Board). To follow as a priority this Wednesday, across the Atlantic, the trade balance of goods at 2:30 p.m., housing sales in progress at 4:00 p.m., and crude stocks at 4:30 p.m.
KEY GRAPHIC ELEMENTS
On the graphic, technical and chartist side, the 11,460 points, put under surveillance, dropped, in conditions of volatility and volumes giving credence to the bearish message. A break in the chartist neck line is fully validated, giving the signal to enter a new working base, between 10,560 and 11,460 points. Very quickly the oscillations melted in the heart of this zone. In the immediate future, a short phase of rebound in protest is to be anticipated. We will carefully observe its characteristics, in particular from the point of view of divergences / convergences between prices and volumes.
FORECAST
Considering the key chart factors we have mentioned, our opinion is positive on the Nasdaq Composite index in the short term.
This bullish scenario is valid as long as the Nasdaq Composite index quotes above the support at 10560.00 points.
CHART IN DAILY DATA
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