Yesterday, the Nasdaq Composite extended the drop into new lows despite a lack of bearish catalysts. In fact, we had pretty much a down day for most markets with selloffs in the US Dollar, Treasury yields and some commodities. On the geopolitical front, not much has changed as the Israeli retaliation continues to be delayed and it’s not even sure if they will strike at all now.
On the macro side, the market has priced out almost all the rate cuts in 2024 as it expects just one cut later in the year. On the data front, we don’t have much to work on in the next couple of weeks except the PCE, which the Fed has already indicated to be slightly higher but mostly unchanged.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite sold off into the first key support level at 15929 following the hot US Retail Sales and the geopolitical news. The price ranged for the entire trading session yesterday as the risk sentiment remained negative. This is where we can expect the buyers to step in with a defined risk below the low to position for a rally into a new all-time high. The sellers, on the other hand, will want to see the price breaking the low to increase the bearish bets into the next support at 15453.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price broke out of the 3-week long range and triggered more bearish momentum as the sellers piled in more aggressively to target a break below the 15929 support. After the breakout of the rising wedge, the market started to rollover from the highs and the chances of seeing a correction all the way down to the base of the pattern at 14477 increases by the day.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a trendline defining the current downward momentum where we can find the confluence of the 38.2% Fibonacci retracement level and the red 21 moving average. If we get another pullback, we can expect the sellers to step in around the trendline with a defined risk above it to position for new lows. Alternatively, the sellers can wait for the price to break the low to increase the bearish bets into new lows. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into a new all-time high.
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