(News Bulletin 247) – The nervous and not very playful part of yo-yoing continues on the flagship index of technology stocks on the American side, as government bond yields varied in temperature. At the time of writing these lines, the Treasuries 10 years were still close to 3.90%, in a market attentive to the explosion of Covid-19 cases in mainland China, and to signs of price tensions, in particular on the employment front.
Yesterday, weekly registrations for unemployment benefits across the Atlantic rose slightly, to 225,000 new units, causing in the very short term a renewed appetite for risk, corroborating the adage “Bad news is good news”. In reality, the market was expecting such a figure, the consensus being exactly at 225,000. Tensions on the labor market, tensions themselves generating inflation, are still strong. And the content of the monthly report next Friday (NFP for Non Farm Payrolls) will provide valuable details. The market expects the unemployment rate to stabilize at 3.7% of the active population and a slowdown in the pace of wage increases in the private sector (excluding agriculture), to +0.4% monthly.
To follow at 3:45 p.m. a barometer indicator of industrial activity, the Chicago PMI.
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 hits on Wednesday, then the symbolic threshold of 10,000 points), before considering a technical protest reaction. The danger is to end this Friday exactly on the low points of the year, condemning the pronounced red candle of the “raw” 2022. Since January 1, the index has bottomed by 33%.
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
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