Fundamental
Overview
The Nasdaq continues to
recover the losses experienced on Friday following Trump’s threat of increasing
tariffs by 100% on China in response to the recent Chinese imposition of export
controls on rare earth minerals.
Over the weekend, we got
more soothing words from Trump and other US officials that eventually led to a
big upside gap at the open. The gap was then filled following a bit more
aggressive comments from US Treasury Secretary Bessent and some Chinese countermeasures
on port fees.
Yesterday, US Trade
Representative Greer repeated mostly the same stuff that we’ve already heard
over the weekend but added two important comments as he mentioned that they are
watching the stock and bond markets and that they want to make sure the market
responds to appropriate info.
This sounds like they don’t
want the market to think this is going to be another April. They want the
market to keep expecting a de-escalation, which has indeed been the case since
the weekend. Even Trump’s late post threatening a termination of cooking oil
business with China sounded like a very weak move.
This suggests a limited
pain threshold by the US administration which shouldn’t be surprising given the
overstretched positioning in the stock markets. The Friday’s selloff was so
aggressive for this reason. So, if things go south between now and November 1,
then we could indeed have another April-like selloff. For now, the downside is
limited by the de-escalatory expectations.
Nasdaq
Technical Analysis – Daily Timeframe
On the daily chart, we can see that the Nasdaq erased most of the Friday’s
losses with the price now trading near the key 25,034 level. This is where we can expect the sellers to
step in with a defined risk above the level to position for another drop into
the major trendline. The buyers, on the other hand, will want to see the price
breaking higher to increase the bullish bets into a new all-time high.
Nasdaq Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the resistance zone around the
25,000 level and the recent choppy price action. There’s not much else we can
glean from this timeframe, so we need to zoom in to see some more details.
Nasdaq Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, if we
get a pullback from the resistance, we can expect the buyers to step in around
the most recent swing low at 24,689. In case the price breaks through that
level though, we can expect the drop to extend into the lows around the 24,400
level as the sellers will likely pile in more aggressively. The Fed speakers
continue to repeat the same old stuff. As of now, we know that only the US CPI
will be published despite the shutdown, which is scheduled for Friday October
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