(News Bulletin 247) – The decline in the Nasdaq Composite is likely to be significant when it reopens on Tuesday, after a weekend made extended due to a holiday across the Atlantic. Persistent pressure on prices, anticipations of a sharper turn than expected on the part of the Fed, runaway demand for energy products are causing the Treasuries at 10 years, which remained above 1.80.
The stocks that are “paid” the most, namely mainly the solid records of American tech whose results are expected to increase in the long term, are in the front line when a stock market decline is brewing. This does not mean that the underlying bullish momentum is in jeopardy. But that the risks of correction are real, and that the amplitude of this correction must be assessed in the light of the initial advances…
“Tech companies will be especially watched during [la publication des] results [trimestriels]”, for Vincent Boy (IG France).” Excessive valuations of this type of stock have been challenged in recent weeks and a disappointing outlook could worsen the correction on the sector.
On the macroeconomic side this Tuesday, to follow at 4:00 p.m. the NAHB index of the residential market (20 representative agglomerations). In the meantime, at 2:30 p.m. the manufacturing index of the NY Fed (Empire State) has just been published, which collapses to -0.7, completely missing expectations. The score had not visited negative territory since June 2020. The Federal Reserve Bank of New York specifies that “delivery times have continued to lengthen and order books to expand. Labor market indicators indicated a moderate increase in employment and a longer average working week. Both price indices fell, but remained high. Looking ahead, however, companies remained optimistic about improving conditions ahead. the scale of the next six months”.
KEY GRAPHIC ELEMENTS
The oblique line symbolizing the trend The bottom line was broken, and after a pullback on January 12, the index started to fall again, with investors mobilizing throughout the session. A serious gap is now brewing, confirming entry into a corrective phase. Without a quick reintegration of 15,000 points, a gradual slide towards 14,180, then 13,330 points, would be the working matrix for the next few weeks.
PREVISION
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 15000.00 points.
CHART IN DAILY DATA
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Source: Tradingsat
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