(News Bulletin 247) – Still very nervous, the Nasdaq Composite once again recorded a candle in marubozu Tuesday (the fourth in five sessions), the first step in validating the break in a technical safeguard zone at 12,640 points. In a bond environment that continues to heat up, mechanically bringing a little shade to a whole section of the rating (the emblematic growth files, of which the index is full), the Nasdaq Composite has lost more than 20% since the beginning of the year.
“For the moment, the year 2022 has been particularly complicated for the American equity markets and it is remarkable that the bearish phases have been triggered by real rate shocks, themselves coming directly from new information on the strategy of reduction of the balance sheet of the Fed”, analyzes Bastien Drut, Head of Thematic Macro Strategy, CPR AM. “The regular tightening of the Fed’s communication over the last few months has been one of the most important determinants of the evolution of the equity markets and helps to explain the significant differences in performance between sectors…”
At the end of the next FOMC on May 03 and 04, a 50 basis point hike is almost certain, without however formally ruling out the hypothesis of a 75 basis point hike, to “mark the coup” definitively .
To be continued, in the heart of the quarterly ball of the major groups, Microsoft, Alphabet and Texas Instruments, the last two having made a copy below expectations. Also to follow Tesla (-12.18% yesterday to $ 876.42), investors showing concern at the prospect of seeing E. Musk reduce its stake in order to finalize the financing of all of the shares of Twitter.
In terms of statistics, which took a back seat yesterday, operators dealt with the publication of durable goods orders for the month of March, up 1.1% month on month, excluding transport equipment. Moreover, the US consumer confidence index (Conference Board) remained almost perfectly stable at 107.3, slightly below expectations. Targets missed on Wednesday, both on the trade balance of goods and inventories of wholesalers.
KEY GRAPHIC ELEMENTS
The thin trading range that we identify that 13,330 and 13,838 points has been broken under conditions of volumes, volatility, and very significant candles. the marubozu traced Thursday shows in particular a mobilization of the selling camp 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 affected yesterday, and the issue until the end of the week will be its preservation, or not. Below, a danger zone is identified.
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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