Fundamental
Overview
The Nasdaq remains under
pressure as despite a softer US CPI and US PPI reports, the components that feed into the
Core PCE increased the Fed’s preferred inflation measure. In fact, the Core PCE
Y/Y is now projected at 2.7% vs. 2.6% prior, while the M/M measure is seen at
0.3% vs. 0.3% prior.
The main fear in the market
is that in case we get a slowdown, the Fed might not be fast enough in cutting
rates amid the inflation constraint and eventually worsen the economic pain.
Moreover, the uncertainty around Trump’s tariffs add to those expectations of a
slowdown in growth and potentially higher inflation in the short-term.
Today we have the
University of Michigan Consumer Sentiment report. As a reminder, the jump in
long-term inflation expectations to a new 30-year high in the prior report
weighed on the market, so that’s going to be in focus today.
Nasdaq
Technical Analysis – Daily Timeframe
Nasdaq Daily
On the daily chart, we can
see that the Nasdaq dropped below the major trendline which doesn’t give it a good
look as there’s not technical support until the 18400 level. From a risk
management perspective, the sellers will have a better risk to reward setup
around the broken trendline where they can position with a defined risk above
the trendline to target a drop into the 18400 level next. The buyers, on the
other hand, will want to see the price rising back above the trendline to
regain some conviction and pile in for a rally into new all-time highs.
Nasdaq Technical
Analysis – 4 hour Timeframe
Nasdaq 4 hour
On the 4 hour chart, we can
see that we have a downward trendline defining the bearish momentum. This is
where we can expect the sellers to step in with a defined risk above the trendline
to position for another selloff into new lows, while the buyers will look for a
break higher to extend the pullback into the major broken trendline around the
20000 level.
Nasdaq Technical
Analysis – 1 hour Timeframe
Nasdaq 1 hour
On the 1 hour chart, there’s
not much we can add here as the sellers will look for a rejection around the
trendline, while the buyers will look for a break higher to target new highs.
The red lines define the average daily range for today.
Upcoming Catalysts
Today we conclude the week with the
University of Michigan Consumer Sentiment report.