Fundamental Overview
The Nasdaq is slowly crawling back to the all-time high. The market continues to look forward to the next year with Trump’s policies being a positive driver for growth.
The only bearish reason we had for the stock market was the rise in Treasury yields. That’s generally bearish only when the Fed is tightening policy though not when yields rise on positive growth expectations.
Right now, the Fed’s reaction function is that a strong economy would warrant an earlier pause in the easing cycle and not a tightening. That should still be supportive for the stock market in the bigger picture.
If the Fed’s reaction function were to change to a potential tightening, then that will likely trigger a big correction in the stock market on expected economic slowdown. For now, the pullbacks look as something healthy and opportunities to buy the dips.
Nasdaq Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq continues to slowly rise towards the all-time high. The buyers continue to lean on the major trendline to position for new highs. The sellers, on the other hand, will need to see the price falling below the trendline to start targeting a correction into the 20K level.
Nasdaq Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the rejections from the trendline as the dip-buyers continue to pile in at every pullback. We have a minor resistance around the 21050 level. The buyers will want to see the price breaking higher to increase the bullish bets into a new all-time high. The sellers, on the other hand, will likely step in around the resistance to position for a break below the major trendline.
Nasdaq Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor downward trendline acting as resistance. A break above it should see the buyers increasing the bullish momentum into the 21050 resistance. The sellers, on the other hand, will likely lean on it to position for a drop into new lows. The red lines define the average daily range for today.
