Fundamental
Overview
The Nasdaq is slowly
crawling back to the all-time high. The market continues to look forward to the
next year with Trump’s policies being a positive driver for growth.
The only bearish reason we
had for the stock market was the rise in Treasury yields. That’s generally
bearish only when the Fed is tightening policy though not when yields rise on
positive growth expectations.
Right now, the Fed’s
reaction function is that a strong economy would warrant an earlier pause in
the easing cycle and not a tightening. That should still be supportive for the
stock market in the bigger picture.
If the Fed’s reaction
function were to change to a potential tightening, then that will likely
trigger a big correction in the stock market on expected economic slowdown. For
now, the pullbacks look as something healthy and opportunities to buy the dips.
Nasdaq
Technical Analysis – Daily Timeframe
Nasdaq Daily
On the daily chart, we can
see that the Nasdaq continues to slowly rise towards the all-time high. The
buyers continue to lean on the major trendline to position for new highs. The sellers,
on the other hand, will need to see the price falling below the trendline to
start targeting a correction into the 20K level.
Nasdaq Technical
Analysis – 4 hour Timeframe
Nasdaq 4 hour
On the 4 hour chart, we can
see more clearly the rejections from the trendline as the dip-buyers continue
to pile in at every pullback. We have a minor resistance
around the 21050 level. The buyers will want to see the price breaking higher
to increase the bullish bets into a new all-time high. The sellers, on the
other hand, will likely step in around the resistance to position for a break
below the major trendline.
Nasdaq Technical
Analysis – 1 hour Timeframe
Nasdaq 1 hour
On the 1 hour chart, we can
see that we have a minor downward trendline acting as resistance. A break above
it should see the buyers increasing the bullish momentum into the 21050
resistance. The sellers, on the other hand, will likely lean on it to position for
a drop into new lows. The red lines define the average daily range for today.