Nasdaq Composite: Powell must tie knots in his brain

(News Bulletin 247) – Once again, on Monday, the Nasdaq Composite started the session exactly on what would constitute its high points, to end on its low points, offering a remarkable candle in marubozu, absolutely without any shadow (the famous wicks ), illustrating a mobilization of the selling side throughout the session. Moreover, on breaking a technical zone of reference, below which our position remains short on the index: 13,330 points. The conflict in Ukraine and its potential impacts on global growth and near-term energy prices, and the turmoil in the Fed’s monetary policy construction are putting pressure, especially in this new context of open power-to-power talks Westerners on a possible boycott of Russian oil.

Compared to Europe, which is more exposed in particular with regard to its dependence on Russian natural gas, César Perez Ruiz, Head of Investments and CIO at Pictet Wealth Management notes that “the American economy is relatively spared by the war and the report on employment for February was quite positive.Despite a low unemployment rate, US wage growth remained moderate last month.It nevertheless remains up 5.1% over the year as a whole and therefore deserves to be noted. “to be watched closely. Fed Chairman Jerome Powell has maintained his tough rhetoric on the fight against inflation.”

Under these conditions, instead of a 50 basis point hike in the Fed Funds on March 16, we can expect a 25 bp hike, i.e. the beginning of the monetary turn, in a simply less tight angle .

To follow the American trade balance at 2:30 p.m. In the immediate future, the NFIB index of small American companies, published at 12:00 (Paris time) disappointed by contracting to 95.7 points.

KEY GRAPHIC ELEMENTS

As a reminder, here are a number of key elements presented last 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 At the bottom, especially in thick volumes, the technical situation becomes problematic. As such, week 07 was very technically challenging. The weekly closing level, which is important, is practically at 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 lined with a school black marubozu. The sales mobilization will have lasted the whole session.

The buying mobilization throughout Thursday’s session is impressive and further validates the entry into a phase of high volatility. However, we remain negative below 13,330 points for the time being. After a short phase of rebalancing forces, where volumes will be put under close watch, the formation of a next bearish leg is envisaged. In the immediate future, after a short phase of perilous rebalancing, in divergent volumes, the scenario of a resumption of the decline below 13,330 takes place. Negative opinion across the upcoming session.

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 13330.00 points.

CHART IN DAILY DATA

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