Nasdaq Composite: Behavioral interpretation of these abrupt variations

(News Bulletin 247) – If initially, on Wednesday, the growth files, in particular on the technology sector, had reacted positively to the Fed’s announcements, Thursday’s session will have been colored bright red on the Nasdaq Composite index , which lost 2.47% to 15,180 points. Graphic result: a red candle with a very elongated body almost without wick, which completely encompasses the body, already elongated too, of the candle of the day before. This intense volatility and this lack of federation illustrates the difficulty of interpreting the strategic shift made by the Fed. This is certainly a reassuring turn, but which will ultimately change the landscape in asset classes to the detriment of growth files which are reaching extremely high valuation levels. In all cases, the sequence of the last two sessions on the index will have illustrated its hypersensitivity.

As a reminder, the Fed paved the way for monetary normalization, by laying out the path a little more clearly. It plans to stop the bond buyback program in March, and a three-quarter point increase in its rates, in three times, over the coming year. And this with the aim of fighting against inflation that is no longer temporary. Associated with the new economic projections, this strategic commitment of the Fed was not considered more “hawkish” than expected. It must be said that this turn (not too tight) was anticipated.

Finally, “a decision quite in line with expectations” for Ronan Blanc, Managing Analyst at Financière Arbevel. “The Fed is trying to become an actor in its monetary policy again with some success (admittedly half-forgiven fault?). And fortunately for it, the cyclical peak of inflation seems close. The longer-term question is to know at what level she could land past that peak. That’s probably where she’ll be expected. So far she’s saving time and doing it pretty well. ” A “courageous” decision, for John Plassard, (Mirabaud), for whom the Fed “is finally tackling the rise in inflation before it gets potentially out of control. Investors have welcomed this decision, betting that the Fed will not will not find himself “behind the curve” by adopting a tone much more hawkish (hawk) and planning 3 rate hikes in 2022.

In the statistical chapter Thursday, the Philly Fed manufacturing index (15.4), just like the weekly registrations for unemployment benefits (206,000), missed expectations. RAS on the federal industrial report generally in line with expectations, both in terms of production volume (+ 0.5%) and that of the rate of use of productive capacities (76.8%).

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 technological 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 ask any questions.

A court terme:

The flagship index of technological stocks on the American stock market has just achieved a fairly clear double support on its 100-day moving average (in orange), which more than ever constitutes a technical and graphic “justice of the peace”. Justice of the peace who could give way this Friday following the bearish all-encompassing structure observed yesterday, with closing on the low of the session, and growth in volumes. The preservation of this moving average will be the stake of the last session of the week, which will determine the final appearance of a weekly candle particularly important in its interpretation.

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 15792.00 points.

DAILY DATA CHART

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