After four consecutive green days, the Nasdaq
Composite yesterday got under some pressure caused by an ugly bond auction that
made Treasury yields to spike higher. The US data before the auction hasn’t
weighed on the index as Core CPI came in
line with expectations and Jobless Claims beat
forecasts again. In fact, the market’s pricing for future interest rates
expectations hasn’t changed much, so we might see yesterday’s dip being bought
back today.
Nasdaq Composite Technical
Analysis – Daily Timeframe
Nasdaq Composite Daily
On the daily chart, we can see that the Nasdaq
Composite finally pulled back a bit after the strong rally from the 13174 support. The
culprit seems to have been the ugly bond auction as we got a spike in Treasury
yields but the buyers stepped in into the close around a key support. The
target for the buyers remains the trendline around
the 13800 level with a breakout likely leading to a new cycle high.
Nasdaq Composite Technical
Analysis – 4 hour Timeframe
Nasdaq Composite 4 hour
On the 4 hour chart, we can see that the price
pulled back into the broken minor trendline in what could end up being a “break
and retest” pattern. This is where we can expect the buyers to pile in with a
defined risk below the trendline and position for a rally into the major
trendline. The sellers, on the other hand, will want to see the price falling
back below the trendline to leave behind a fakeout and target again a break
below the 13174 support.
Nasdaq Composite Technical
Analysis – 1 hour Timeframe
Nasdaq Composite 1 hour
On the 1 hour chart, we can see more
closely the bullish setup with the support zone around the 13500 level where we
have the confluence with
the broken trendline, the swing support and the 38.2% Fibonacci
retracement level of the entire rally. A break below
the support should invalidate the setup and lead to more selling.
Upcoming
Events
Today the only notable event on the agenda is the
University of Michigan Consumer Sentiment report although it has lost its
market moving ability lately. Only big surprises are likely to have an impact
on the market.