(News Bulletin 247) – The Nasdaq Composite index (-1.02% to 11,789 points), is in the midst of defining the amplitude of a new range, i.e. a lateral framework, between 11,450 points of on the one hand, and 12,260 points on the other. The nervous oscillations of 10-year Treasuries, the yields of 10-year American sovereign bonds, catalyze marked volatility on the flagship index of technology stocks on the American side. And this while operators are still in the analysis of the latest outings of J Powell, after the FOMC and during an event in front of the Economic Club of Washington.
Alexandre Baradez precisely insisted this week, in a market note, on “a divergence […] between the markets (especially the equity markets) and the clearly stated intentions of the central bankers.”
“Jerome Powell recalled last Wednesday that there was “no room for complacency”, that the markets should “reflect the degree of monetary tightening put in place”, that according to the Fed’s expectations, it will not there would be no rate cut this year […] Jerome Powell recalled the notion of “higher for longer” for rates, meaning that even after reaching the terminal level, rates would remain high for a relatively long period before being lowered. The Fed Chairman made it clear that there would be “more” rate hikes as part of the market was convinced that March would mark the last 25 basis point rate hike. Without forgetting the references to the job market which remains “extremely tense” to use the words used.
As a reminder last Friday, the NFP report (No Farm Payrolls) highlighted job creations of more than 510,000 in the private sector, against a backdrop of a contraction in unemployment to 3.4% of the active population.
On the value side, Alphabet lost an additional 4.39%, after 7.68% the day before, in the wake of an incomprehensible blunder on the part of a digital juggernaut. The ex-Google, which is launching its conversational AI tool to compete head-on with ChatGPT, released a promotional video in which the robot is wrong on a question that has no trap for AI, about the discoveries that have been made possible by deployment of the James Webb Space Telescope. For Deutsche Bank, the stock market plunge that followed this odd “shows the high stakes and the competitive pressures of new technologies”.
KEY GRAPHIC ELEMENTS
We did not witness an island reversal on Friday, due to the high shadow drawn. What accredit the scenario of a volatile consolidation rather than a reversal. The idea of a pullback on 11,450 points remains entirely credible at this stage. In any case, the new working technical band is between 11,450 and 12,260 points.
FORECAST
In view of the key chart factors that we have identified, our opinion is neutral on the Nasdaq Composite index in the short term.
We will take care to note that a crossing of 12260.00 points would revive the tension in the purchase. While a break of 11450.00 points would relaunch the selling pressure.
CHART IN DAILY DATA
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