Fundamental
Overview
The hawkish repricing
triggered by Fed Chair Powell’s uncertainty on a December cut coupled with the
intensifying overnight funding pressure due to prolonged government shutdown
weighed on the stock market in the last week.
The market bounced strongly
on the expectations of the end of the shutdown on Friday and extended the gains
this week as the expectations grew stronger. The Nasdaq has now basically
erased all the losses experienced last week.
Looking ahead, the end of
the shutdown will finally bring back the key US data like the NFP and CPI, and
those are going to be key risk events for the market ahead of the FOMC decision
in December. As a reminder, there’s a strong debate within the FOMC whether a
December cut is warranted at this point. The data will have the final say.
Strong data is likely to
weigh on the market on a further hawkish repricing, while soft data should give
the market a boost as rate cut bets would increase.
Nasdaq
Technical Analysis – Daily Timeframe
On
the daily chart, we can see that
the S&P 500 bounced near the major trendline and extended the gains this
week as the end of the shutdown drew near. The target for the buyers is of course a new all-time high, but we can
expect the sellers to step in around the all-time highs with a defined risk
above to position for a drop back into the major trendline.
Nasdaq Technical
Analysis – 4 hour Timeframe
On
the 4 hour chart, we can see that
the bullish momentum eased recently as the price action became more rangebound.
We have the most recent swing low around the 25,474 level and that’s where we
can expect the buyers to step in with a defined risk below the level to
position for a rally into a new all-time high. The sellers, on the other hand,
will want to see the price breaking lower to pile in for a drop back into the
major trendline.
Nasdaq Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, there’s
not much else we can add here but if we don’t get a pullback into the swing
low, we can expect the buyers to increase the bullish bets on the break above
the recent high at 25,832. The red lines define the average daily range for today.
This article was written by Giuseppe Dellamotta at investinglive.com.
