Yesterday, the Nasdaq Composite sold off following a hot US CPI report that sent Treasury yields and the US Dollar higher as the market priced out rate cuts further. The most frightening part was that the Fed Chair Powell’s preferred measure, the Core Services ex-Housing, jumped by 0.85% M/M which was the biggest increase since April 2022. The market might even look past this report as the Fed is not expected to restart hiking rates anyway, but it should start getting harder and harder for the bulls to keep the conviction at these levels.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite yesterday fell into the key trendline where we have also the red 21 moving average for confluence. This is where we can expect the buyers to step in with a defined risk below the trendline to position for another rally into the all-time high. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and position for a drop into the 15150 support.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that besides the trendline and the moving average, we have also the 50% Fibonacci retracement level standing around the 15635 support. This gives the buyers another layer of confluence. What happens here will likely decide where the market will go in the next few weeks as a strong bounce should lead to a rally into the all-time high, while a break lower will likely trigger a selloff into the 15150 level.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the buyers will need to break above the most recent swing high at 15765 to confirm the rally into the all-time high. If the price fails and falls back into the trendline, the chances of a downside breakout will increase.
Upcoming Events
Tomorrow we will see latest US Jobless Claims figures and the US Retail Sales. On Friday, we conclude the week with the US PPI data and the University of Michigan Consumer Sentiment survey.