(News Bulletin 247) – The Nasdaq Composite index (+3.59% to 13,255 points yesterday) is expected to drop significantly this Thursday at the opening, volatility remaining commensurate with the geopolitical tensions induced by the conflict in Ukraine, while Joe Biden this week ordered the embargo on the import of petroleum products into the United States from Russia. In the immediate future, operators took note of inflation figures without any deviation from the consensus. The consumer price index, excluding food and energy, rose by 0.5% month on month, confirming the lasting nature of inflation across the Atlantic. Enough to bring additional food for thought to a Fed which is in a delicate position, probably less than the ECB of course, to begin its process of raising rates. On March 16, it ends a new meeting of its Monetary Policy Committee (FOMC), following which a 25 bp increase in Fed Funds is anticipated. It will have benchmarks on employment, whose signs of tensions are still present (new JOLTS job offers yesterday). As for weekly registrations for unemployment benefits, published a few minutes ago, they came out at 227,000 new units in week 09, close to expectations.
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 entire session.
The buying mobilization throughout the session on Thursday 02/24 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.
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 14150.00 points.
CHART IN DAILY DATA
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