(News Bulletin 247) – While the FANGAM quarterly ball is coming to an end, against a backdrop of market hypersensitivity to these valuation levels, the challenge in the trading rooms is more than ever to further refine the increase in federal rates over the year. The prospect of a “double” hike in March (ie 50 bps all at once) seems to be receding. In any case, by its confusing nature, the latest federal monthly employment report, published on Friday, will not have supported one scenario more than another. Technological heavyweights will take the opportunity to catch some air on a few bargain purchases. No rebound to report for MetaPlatforms, which collapsed 26.40% the day before, posting a drop in its users for the first time in its history.
The unemployment rate has – it is a surprise – slightly increased to 4% of the active population, but job creations have exploded expectations, while earlier in the week, the ADP cabinet survey showed a balance negative. Such a gap between ADP and NFP is rare, even if the methodologies are different. The Bureau of Labor Statistics has therefore just published 467,000 job creations, literally exploding the consensus (110,000). “Job growth continued in leisure, events, business services, retail trade, and transportation and warehousing,” the latest report read.
No major statistical figures are on the agenda for Monday, and we will have to wait until tomorrow to be able to deal with American indicators, namely the NFIB score for small businesses and the latest trade balance figures.
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 on Wednesday on confirmation of the price / volume divergence, immediately followed by a bearish gap, 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 14445.00 points.
CHART IN DAILY DATA
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