Nasdaq Composite: Awaiting Fed Transformation of Test

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(News Bulletin 247) – The Nasdaq Composite index opened very strongly yesterday, beyond the upper limit of its consolidation flag, in the wake of the publication of inflation figures (November CPI), before gradually fall back in session, to manage to keep all the same 1.01% to 11,256 points. Although inflation, which is beginning to show signs of “tepidation”, initially galvanized appetite for growth stocks, technology in the lead, caution was palpable on the eve of the outcome of the last FOMC of the year.

The announcement of these consumer prices “was envisaged with feverishness”, explain the strategists of Tikehau Capital: “a sharper than expected fall in inflation would have validated the idea a little more than a “soft landing ” of the American economy is possible, with a return of inflation to more acceptable levels for the economy. Conversely, signs of resilience of this inflation would have reminded us that the battle on this front is not still won, and that monetary policies could remain restrictive for some time.”

The CPIs “confirmed a strong disinflationary trend, with weaker than expected price inflation indicators. These results will provide some relief to central bankers and economists worried about the possible persistence of inflation in our economies.”

It is this Wednesday that the Federal Reserve completes its monetary policy committee. If a 50 basis point increase in Fed Funds is almost acquired, the operators will try, during the press conference following the monetary announcements, to detect the slightest clue to refine the shape of the rate trajectory for 2023, and especially the value of the “terminal” rate.

See you at 8:00 p.m. for the Fed’s monetary announcements and at 8:30 p.m. for the press conference.

KEY GRAPHIC ELEMENTS

In the immediate future, the flagship index of technology stocks on the American side is close to the upper limit of a flag, around 11,460 / 11,500 points, beyond which a breathing zone would open, subject to growth in volumes and sectoral federation (IT, entertainment, semiconductor, robotics, IA).

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

©2022 News Bulletin 247

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