Nasdaq Composite: Will Powell change gears?

by

(News Bulletin 247) – The rise in LT US government bond yields (the famous Treasuries 10 years) have caused a number of so-called growth stocks on the other side of the Atlantic to decline, mainly technological stocks, including the Nasdaq Composite index (-2.26% to 14,204 points) abounds. Warm-up maintained, with the approach of the publication of the Minutes by a member of the Board, Mrs Brainard, who, during a conference organized by the Minneapolis Fed, surprised the markets by campaigning for a strengthening of monetary policy, by increasing the pace of reduction in the size of the balance sheet and bearing more aggressive for the ascent of Fed Funds. The one who is not known to be particularly hawkish has clearly prepared the ground… It must be said that, even if the fear of a price/wage spiral was temporarily erased last Friday with the federal employment report, the prospect of a lasting inflation weighs in the balance .

Sébastien Galy, Senior Macro Strategist offers the following reading: “The worry is that the Fed will stay behind the curve too long, forcing it to recover too quickly, with the risk of a recession. History suggests that this tends to happen because the dynamics of an abnormally hot labor market are difficult to predict. The difference this time around is that the midterm elections are coming soon, and inflation is a major topic. This means that for some time the Fed will likely try to get ahead of the curve and that may well continue heading into the presidential election.”

The appointment is therefore ticked for 8:00 p.m. for forex traders, with the Minutes of the Fed, traditional minutes of the last FOMC meeting. In March, the Fed Funds were raised by 25 bps.

KEY GRAPHIC ELEMENTS

On the technical side, as long as the flagship index of technology stocks on the American side remains above 13,838 points, nothing is to be feared. This is a technical threshold easily regained, on a combination of candles in “three advancing soldiers”, from March 16 to 18. A move below 14,445 points was validated on Thursday signifying a reintegration of a trading range above 13,330 points. All against a background of divergence between prices and volumes. Two bearish CT targets are currently locked: 13,840 and 13,330 points. The volumes are put under surveillance.

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 14660.00 points.

CHART IN DAILY DATA

©2022 News Bulletin 247

You May Also Like

Recommended for you

Immediate Peak