Fundamental Overview
Yesterday, the Fed finally started its easing cycle and decided to do it with a 50 bps cut. The market was already leaning towards a 50 bps move, so it wasn’t a surprise.
The larger cut was framed as kind of an “insurance” cut with the dot plot showing two more 25 bps cuts by the end of the year and less than the market expected in 2025.
What’s important is that the Fed is cutting into a resilient economy which should lead to better growth expectations and support the stock market.
Nasdaq Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq is now back at the key 20000 level. The sellers will likely lean on the level to position for a drop into the major trendline. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into new highs.
Nasdaq Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a minor 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 lower to increase the bearish bets into new lows.
Nasdaq Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more clearly the recent price action with the whipsaw on the Fed’s decision and then the rally overnight. There’s not much else we can glean from this timeframe as the buyers will look to buy the dips, while the sellers will wait for a bearish catalyst or a break below the trendline. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the latest US Jobless Claims figures which is the last important economic release of the week.