The good news on the economy continues to be trumped by further tightening in financial conditions due to rising Treasury yields, and the tensions in the Middle East increasing. In fact, on a forward-looking basis, these events are likely to weigh on the economy further down the road, which is not a good thing for the market. Yesterday, the US Jobless Claims beat expectations once again but the Continuing Claims missed for a second time in a row, which might be signalling that laid off people are finding it harder to find another job fast.
Nasdaq Composite Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq Composite broke down and it’s now at a key support around the 13174 level. This is where we can expect the buyers to step in with a defined risk below the level to position for a rally into the top trendline around the 13700 level. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 12274 level.
Nasdaq Composite Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a minor trendline adding an extra layer of confluence to the 13174 support level. This is likely to be a “break it or make it” moment for the Nasdaq Composite as a break to the downside would open the door for much lower prices.
Nasdaq Composite Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that if we were to get a bounce here, the sellers are likely to lean on the previous support now turned resistance around the 13340 level where we can also find the 50% Fibonacci retracement level and the red 21 moving average. The buyers will want to see the price breaking above that resistance zone as well to invalidate the bearish setup and target the highs with more conviction.
