Fundamental
Overview
The Nasdaq rallied to the
recent highs last Friday despite the higher-than-expected US CPI and PPI reports. The Fed targets the PCE though and
the Core PCE Y/Y is now expected to tick lower to 2.6%.
The market has now priced
out the aggressive rate cuts expectations and it’s almost perfectly in line
with the Fed’s projections. Therefore, we will continue to see rate cuts into a
resilient economy, which is a bullish driver for the stock market.
Also, as a reminder, the
Fed’s reaction function has changed, so stronger data will just potentially
cause a pause in the easing cycle at most. They are not even thinking about
tightening anymore. The next big risk event for the market will be the US election
in November.
Nasdaq
Technical Analysis – Daily Timeframe
Nasdaq Daily
On the daily chart, we can
see that the Nasdaq is now back to the recent highs around the 2530 level. This
is where we can expect the sellers to step in with a defined risk above the
high to position for a drop back into the 19818 level. The buyers, on the other
hand, will want to see the price breaking higher to increase the bullish bets
into the all-time high.
Nasdaq Technical
Analysis – 4 hour Timeframe
Nasdaq 4 hour
On the 4 hour chart, we can
see more clearly the recent price action with higher lows pushing into the
20530 level. There’s not much we can glean from this timeframe as the sellers
will look for a rejection from the high, while the buyers will want to see a
break to push into new highs.
Nasdaq Technical
Analysis – 1 hour Timeframe
Nasdaq 1 hour
On the 1 hour chart, we can
see that the market has been consolidating between the 2500 resistance
and the 2330 support. The buyers will look for an upside breakout to push into
new highs, while the sellers will want to see the price breaking lower to
target a drop into the 19800 level. The red lines define the average daily range for today.
Upcoming Catalysts
This week is pretty empty on the data front with just a couple of key economic
releases. Today, we have Fed’s Waller speaking, while on Thursday, we get the
US Retail Sales and US Jobless Claims data.