Nasdaq Composite: Atmosphere refreshed by the Minutes

(News Bulletin 247) – Quite significant reflux on the Nasdaq Composite, which lost 3.34% to 15,100 after the firm tone felt in the Minutes *, a traditional account of the content of the debates of the last Monetary Policy Committee. The markets were surprised by the tense discussions around the schedule for reducing the balance sheet.

The slightly more “hawkish” tone adopted by the Fed at its last monetary policy meeting than expected appears more as an excuse to indulge in some profit-taking than as a real surprise, according to Jeffrey Halley, analyst at Oanda. “The minutes revealed that the members of the committee (of monetary policy, or” FOMC “, Editor’s note) felt that the risks of high inflation were now persistent, and that there was general agreement on the acceleration of the rate hike, with three interim rate hikes planned. That is exactly what we were told at the “post-FOMC” meeting by President Jerome Powell. The only surprise, if you can call it that, is that some members have estimated that the Fed should start reducing its balance sheet soon after its first rate hike, “he commented.

In the end, the Nasdaq Composite, rich in technological growth stocks, is in essence the first index to undergo this hardening of tone. Note the gap with the Dow Jones in particular, which, rich in banking and industry, fell only 1.07%. That being said, the onset of a reflux, as volatile as it is, remains marginal with regard to the initial progress …

Statistical side, yesterday, operators took note of the results of the ADP (Automatic Data Processing) survey on employment. According to the private human resources firm, the US economy created 807,000 jobs in the private sector (excluding agriculture) in December, largely beating the target, the highest since May. Verdict Friday with content from NFP (Non Farm Payrolls), the federal monthly private employment report.

To follow at 4:00 p.m. the PMI services (ISM) at 4:00 p.m.

* The Minutes are a detailed report, including the content of the exchanges and debates which animated the FOMC two weeks previously. The operators, beyond the monetary policy decisions they already know, scrutinize the balance of power between hawkish and the dovish, the arguments used in the debates, and more broadly the tone of these debates. For the more curious, here is the document released yesterday, and which caused this downward acceleration.

The 10-year Treasuries heated up in the process; they are still maintained this Thursday, shortly before the opening, near 1.73.

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. An oblique straight line (drawn in black) perfectly symbolizes the basic appetite of buyers, as well as their long-term mobilization.

A court terme:

However, the picture is more nuanced in the short term since the all-round bearish of November 22, after recordings of historic highs. Yesterday in solid volumes, the index came to close on the low points exactly, after continuous losses during the session, leaving a trace of a candle in marubozu school. The flagship index of technology stocks in the US came to test a steeply sloping bullish slant (in black), which we are putting under close watch.

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 the resistance at 15900.00 points.

DAILY DATA CHART

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