Nasdaq Composite: The Fed rereads The Black Swan

(News Bulletin 247) – The Nasdaq Composite index, which had nevertheless opened the debates down sharply on Thursday, ended the session up 3.34%, the Russian military aggression in Ukraine having been interpreted, during the session, as a “black swan”, an extremely rare and unforeseen event behavioral theory, an event that can have exceptional consequences. Among these consequences, why not that of a hypothetical “aid” from the Fed, or at least the possibility of witnessing a less tight monetary turn than expected in 2022…

Uncertainty remains no matter what happens as to the position of the Fed, which is due to convene its Monetary Policy Council next month. Everything depends on the real intentions of V. Putin. “We do not really know the Russian intentions: to invade all of Ukraine and install a government under the orders of the Kremlin (a risky approach because Russia would get bogged down in an occupation of Ukrainian territory with the risk of entering an Afghan-type quagmire …) or destabilize the Ukrainian army (and its rear bases) to better settle in the Donbass or even within a wider area going from the Donbass to the already annexed Crimea (to completely control access to the Sea d’Azov)”, explains Sébastien GRASSET, Member of the Management Board and Director of Asset Management at AURIS Gestion.

“Central banks will play a key role in calming financial markets and certainly delaying expectations of monetary contraction. We are in a way similar to March 2020.” can we read this morning in a note from Richelieu Gestion.

Statistical benchmarks took a back seat yesterday. It should be noted, however, that the US Q4 GDP, in final data, came out in line with expectations, at +7.0% quarter on quarter.

To follow the revised data of the index of consumer confidence (U-Mich) and PCE prices this afternoon.

KEY GRAPHIC ELEMENTS

As a reminder, here are a number of key elements presented on Wednesday: “Congestion is expected between 13,330 points and 14,445 points, i.e. a wide band where operators’ nervousness can be expressed. In the event of an exit by the low, especially in thick volumes, the technical situation becomes problematic. As such, week 07 was a very high technical stake. The weekly closing level, of importance, is practically on the lows of the week.” In the light of the strength of the breach of this threshold, the 13,330 points are swung into major resistance, even if the index came to end Thursday’s session above it. The technical conditions of the breakout are indeed eloquent: bearish engulfing coupled with a marubozu school black. The sales mobilization will have lasted the entire session.

The buying mobilization throughout Thursday’s session is impressive and further validates the entry into a phase of high volatility.

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 14445.00 points would revive the tension in the purchase. While a break of 12140.00 points would relaunch the selling pressure.

CHART IN DAILY DATA

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