(News Bulletin 247) – The degree of nervousness is very high on Wall Street, especially on the “Growth” side of the rating, i.e. a good part of the technology sector, very strongly represented in the index that interests us here: the Nasdaq Composite. Investors have to deal with a very complex equation, with 4 factors that influence each other: the very clear strengthening of monetary policies, the rising prices that are setting in, the logistical problems of the supply chain and the war in Ukraine… This is the picture that does not encourage risk taking, and that causes bond yields to warm up, US Treasury bonds LT (Treasuries 10 years) now approaching the symbolic threshold of 3%.
Hence a very sharp downward acceleration of the Nasdaq Composite on Friday (-4.17% to 12,334 points), catalyzed at the time by very disappointing publications on barometer indicators of industrial activity in China and by the fall in the emblematic Amazon share (-14.50% to $2,485.63), which returned a disappointing copy, with a net loss in Q1 2022, despite the dynamism of its “cloud” division.
In addition, the week for operators will be particularly busy on the American employment front, with a preview of the new job offers (JOLTS) tomorrow, the survey by the private firm ADP on Wednesday, the weekly registrations for unemployment benefits on Thursday and culminating in the federal jobs report for the month of April on Friday. Data particularly followed by the Fed in its assessment of the degree of tension on the job market. Fed which will end a new meeting of its Monetary Policy Committee on Wednesday. A rise in Fed Funds of 50 basis points is on the table.
To follow the PMI ISM industrial activity indicator at 4:00 p.m.
KEY GRAPHIC ELEMENTS
The thin trading range that we identified between 13,330 and 13,838 points was broken under conditions of volumes, volatility, and very significant candles. the marubozu traced on Thursday 04/21 shows in particular a mobilization of the selling side throughout the session, until a close almost exactly on the low points, opening the way to a bearish target CT at 12,640 points. The latter was broken, after a hesitantly nervous hesitation on the second part of last week. We specify on Friday that “the shape of the weekly candle will be important.” It is indeed very unattractive, and it is also the fourth time in four weeks that the index has closed on its weekly lows. The warnings light up.
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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