The Nasdaq index has moved down to test the 61.8% retracement of the move up from the June 16 low that level comes in at 11562.05. The July 26 swing low (the price closed just below its 100 day moving average on that day) is also being tested at 11538.78 today. The low price reached 11555.17.
The price has bounced modestly and currently trades at 11580. That is still down 232.7 points or -1.97%. However it does take the price back above the aforementioned target levels. Nevertheless the price sits on another fence that is in jeopardy of being jumped over to the downside.
On the other side of that fence is that the stocks are probably oversold. The technical levels are in place between the 61.8% retracement and the July 26 low. So risk can be defined against those levels. If the price stays above maybe you get up rebound. If the price moves below, stops could be triggered.
The NASDAQ and the major indices have been down for 5 consecutive days since the Jackson Hole speech from Fed chair Powell. The expectations for a 75 basis point hike is now close to 80%.
However, the Fed said they were data dependent and one of those data pieces comes out tomorrow with the US jobs report. US CPI data will also be a key data point.
BUT...
The chair last week made it clear that rates are at best neutral and that they need to go into restrictive levels to snuff out inflation for good. Moreover, he was clear that the Fed would keep rates at higher levels for the foreseeable future in order to bring demand down to supply.
