Fundamental Overview
The Nasdaq has been on a sustained rally ever since the last FOMC decision with the market continuing to price in a back-to-back 50 bps cut in November. More recently, the PBoC surprised with strong easing measures as Chinese officials seem to have finally decided to go bigger. The market might now looking forward to a pick-up in global growth.
On the economic data side, the latest US consumer confidence surprised to the downside with worrying labour market data, but the market quickly faded the reaction. One possible reason could be that the data didn’t incorporate the latest Fed’s decision so the market might want to wait a bit more to see if things pick up in the next months.
Nasdaq Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq broke above the 20000 level and extended the gains into new highs. If we get a pullback, the buyers will likely step in around the 20K level to position for the continuation of the uptrend. The sellers, on the other hand, will want to see the price breaking lower to pile in for a drop into the 19000 level.
Nasdaq Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have an upward trendline defining the current bullish momentum. If we get a pullback, the buyers will likely lean on the trendline to position for new highs, while the sellers will look for a break below the trendline and the 20K level to pile in for new lows.
Nasdaq Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more clearly the recent price action with the strong rally overnight amid reports of China considering a huge capital injection into top banks.
There’s not much else we can glean from this timeframe as the buyers will look to buy the dip on the trendline, while the sellers will look for a break lower to start targeting new lows. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the latest US Jobless Claims figures, while tomorrow we conclude the week with the US PCE report.