(News Bulletin 247) – The Nasdaq Composite Index is expected to see bright red dominate in early trading on Thursday, with Meta Platforms opening down sharply. In post-market trading yesterday, the action of the former Facebook lost almost 20%. The social network, which has become Meta Platforms to “preempt” what promises to be the future of the Internet (the Metavers), has for the first time announced a drop in its number of active users, accompanied by a forecast deemed disappointing in its annual income. Conversely, as a reminder, Alphabet (ex-Google) jumped 7.52% to $2,960, in the wake of the announcement of a near doubling of annual profits… Quarterly results that confirm , for the FANGAMs, their very heterogeneous nature, and especially the hypersensitivity of the markets on these valuation levels.
In terms of macroeconomic figures, it is employment that will attract attention to this second part of the week. Especially since the signals of tension are necessarily scrutinized as they constitute, with the dynamics of prices, an essential basis for reflection and work for the Fed in the construction of monetary policy. Verdict tomorrow with the results of the NFP report (for No Farm Payrolls). Yesterday, the private human resources firm ADP highlighted a “destruction” of more than 300,000 jobs, where the financial community was rather expecting a soft landing, after almost 800,000 job creations in the private sector ( excluding agriculture) in December. And this Thursday, weekly jobless claims for week 04 came out down, beating expectations, at 238,000 units.
To follow the final data of the ISM services at 4:00 p.m. for the month of January.
KEY GRAPHIC ELEMENTS
Let’s stop for a moment on the combination of candles validated on Thursday, firmly campaigning for a continuation of the ebb: a so-called three-cord black structure. The three black ravens are sometimes called “three-winged raven”, a term that comes from a Japanese expression saying that “bad news has wings”. This combination portends prices to fall if they appear at market highs or during an uptrend. Visually, the 3 crows are 3 black candlesticks, combining the following 2 characteristics:
1) All 3 candlesticks close at or near their lows.
2) Each open must be inside the body of the previous candle.
The structure is therefore fully validated and the thick and constant volumes on the three candles highlight its direction, in a market worried about the rise in long-term government bond yields.
In the end, over the whole of week 03, and on high cumulative volumes, the index will have closed on its session lows four times. In weekly data, this is the third time that it has closed on (or almost on) its weekly lows.
The oblique line symbolizing the underlying trend was broken, and after a pullback on January 12, the index started falling again on January 13, with investors mobilizing throughout the session. Since then, the index has almost returned to levels where it had drawn a W on the slant last May. Breaking these levels would be problematic.
In the immediate future, the hanging candle drawn yesterday on confirmation of the price/volume divergence invites selling.
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 14880.00 points.
CHART IN DAILY DATA
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Source: Tradingsat
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