Nasdaq Composite: Towards a visit of 10,000 psychological points before technical rebound

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(News Bulletin 247) – Against a backdrop of an acceleration in the heating of 10-year sovereign bond yields, the Nasdaq Composite (-1.49% to 10,546 points yesterday) should approach the second session of the week in the red, still under the impact of the very firm tone of the press conference following the last FOMC of the year, last week.

“Jerome Powell’s speech […] put investors in their place, who understood that a soft-landing would probably not come hand in hand with a pivot from the American Federal Reserve” coldly observes Vincent BOY (IG France). see inflation persist over the long term.”

The Treasuries 10 years are now flirting with 3.70%. Growth stocks in American tech (entertainment, semiconductors, IT services) suffer more, mechanically, than the rest of the rating.

“Fed watchers appear to have moved away from concerns about the pace of rate hikes and the final level of rates, to instead wondering how long interest rates will remain at restrictive levels,” strategists said. Muzinich & Co.

As a reminder, Fed members raised their rate projections to 5.1% for 2023 and 4.1% for 2024, from 4.6% and 3.9% respectively at their September meeting. They also anticipate higher inflation, at 3.1% for 2023, against 2.8% previously, and at 3.5% for “core” inflation, i.e. excluding the price of energy. energy and food, against 3.1% in September.

“Until now, any bad statistics were welcomed by investors and were positive for the financial markets, because they anticipated a more lenient Fed,” continued M Boy. “From now on, it is very likely that the bad economic data will be negative for the evolution of the global indices, due to fears of a recession in 2023.” However, the latest activity barometers (PMI in preliminary data for December) were seriously disappointing, completely missing their target. The Consumer Confidence Index (Conference Board) will be, in this context, the hot weather of tomorrow’s session.

KEY GRAPHIC ELEMENTS

The flag (November 11 / December 14) is now broken, under volume conditions that make sense. The remainder of the November 10 gap is now fully filled, without isolation of sessions; the index has two short-term “falling points” (10,260, then the symbolic threshold of 10,000 points), before considering a technical protest reaction. Price navigation is going to be very technical until the end of the year.

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 10960.00 points.

CHART IN DAILY DATA

©2022 News Bulletin 247

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