Yesterday, the Nasdaq Composite finished the day negative as we got a huge selloff late in the day. The catalyst was attributed to the news of a possible Israel-Iran conflict which triggered risk off flows and the algos did the rest to exacerbate the move. If that’s really the case, the market will not want to be long risk into the weekend, so we might see some more weakness today or at least a consolidation. A lot will also depend on the US NFP report today as strong data across the board, especially on the wage growth side, could put even more pressure on the price heading into the US CPI next Wednesday.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite has been diverging with the MACD for a long time. This is generally a sign of weakening momentum often followed by pullbacks or reversals. The price recently broke out of the rising wedge and after a brief bounce on the key 16206 level where we had the red 21 moving average for confluence, the market sold off yesterday falling below the critical level. The technicals have now turned bearish.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price bounced on the 16206 level where we had also the 61.8% Fibonacci retracement level for confluence and eventually reversed and fell into new lows. The target should now be the 15929 level where the buyers will likely step in with a defined risk below the level to position for a rally back into new highs. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the next support at 15453.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the recent price action with the strong bounce on the key 16206 support zone and then the complete reversal yesterday into the close. The catalyst for the selloff was attributed to the news of a possible Israel-Iran conflict, which triggered risk off flows. There’s not much else to glean from this chart and the market will look forward to the US NFP report today for the next move.
