Fundamental
Overview
The Nasdaq had a good
performance at the start of last week following the US CPI report as the data
came mostly in line with expectations. In the following days though, we got
some hottish data with the US PPI beating expectations by a big margin, the US
Jobless Claims improving further and the inflation expectations in the UMich
survey surprising to the upside.
Following the data, traders
turned their attention to Fed Chair Powell’s speech at the Jackson Hole
Symposium on Friday. The risk of something hawkish led to profit-taking and
some hedging into the event, which eventually turned into a deeper pullback.
Most likely, Powell won’t
pre-commit to anything and just reiterate that they will decide based on the
totality of the data. This is the baseline expectation. If he were to signal a
rate cut in September, then the Nasdaq will likely rally as hedges get unwound.
Conversely, if he were to
close the door for September by saying something like “we might not have enough
data to consider a rate cut in September”, it would be interpreted as hawkish,
and we should see more downside for the stock market.
Nasdaq
Technical Analysis – Daily Timeframe
Nasdaq Daily
On the daily chart, we can
see that the Nasdaq pulled all the way back to the major upward trendline.
This is where we can expect the dip-buyers to step in with a defined risk below
the trendline to position for a rally into a new all-time high. The sellers, on
the other hand, will look for a break lower to extend the pullback into the
22,800 level next.
Nasdaq Technical
Analysis – 4 hour Timeframe
Nasdaq 4 hour
On the 4 hour chart, we can
see that we had a minor upward trendline defining the bullish momentum on this
timeframe. As the price broke below the trendline, the sellers piled in to
position for a pullback into the major trendline and the defensive plays into
Jackson Hole did the rest.
There’s not much else we
can add here as the buyers will likely pile in around these levels to target a
new all-time high, while the sellers will wait for a break lower to increase
the bearish bets into new lows.
Nasdaq Technical
Analysis – 1 hour Timeframe
Nasdaq 1 hour
On the 1 hour chart, we can
see that we have now a minor downward trendline defining the bearish momentum
on this timeframe. The sellers will likely lean on the trendline to position
for a drop into new lows with a better risk to reward setup. The buyers, on the
other hand, will look for a break higher to increase the bullish bets into new
all-time highs. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have Fed’s Waller speaking and
the FOMC meeting minutes. Tomorrow, we get the US Flash PMIs as well as the US
Jobless Claims figures. Finally, on Friday, we conclude the week with Fed Chair
Powell speech at the Jackson Hole Symposium.
