The miss in the ADP report yesterday gave the market a bit of relief after a series of strong economic data like Jobless Claims, ISM Manufacturing PMI and Job Openings. The ISM services PMI has also printed bang on expectations, and coupled with the other reports, supports the soft-landing narrative. Moreover, the market was also helped by the fall in Treasury yields and Oil prices which might calm the fears of another inflationary wave. Today, we got another beat in Jobless Claims data and at this point it’s going to be interesting to see if the market takes it as a good sign for a soft landing scenario or starts to fear again more rate hikes. Technically, we are also around key levels and the selloff after the more hawkish than expected FOMC dot plot might need at least a correction.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite bounced again yesterday following the miss in the ADP report and avoided a complete breakdown. The price is consolidating around the 13174 support zone and it’s now about having the patience to wait for a breakout.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that yesterday’s bounce might have formed a double bottom around the support zone which would be a nice bullish signal. The red 21 moving average is still acting as dynamic resistance but the real level to break for the buyers is the 38.2% Fibonacci retracement level. In fact, a break above that level would open the door for a rally into the trendline around the 13800 level. We can expect the sellers to step in around the Fibonacci resistance to defend the level and position for a break below the support.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the range created between the 13355 resistance and the 13000 support. A break to the upside should lead to a rally into the 13800 level while a break to the downside is likely to see a selloff into the 12274 level.
Upcoming Events
Tomorrow we have the NFP report which is going to be a market mover and the only one the Fed will see before its next rate decision.
