Greetings buying and selling fiends! It’s going to be a busy week for equities with central financial institution occasions and earnings stories forward!
Will the volatility and fundies draw extra sellers into the downtrend on NAS100, or will the bulls defend and push greater?
NAS100 1-hour Chart by TradingView
We’re gonna begin the brand new week and shut out the month of October with a recent have a look at the Nasdaq 100 Index! Sellers have taken this over pair this month, fueled by excessive bond yields, geopolitical dangers lifting threat aversion conduct, and bearish reactions to tech sector earnings.
And it seems like volatility isn’t able to die down but with the shut of October as this week’s listing of catalysts continues to stay heavy, most notably with the Federal Reserve’s newest financial coverage assertion forward, a possible for an escalation within the Israel-Hamas struggle, and extra tech earnings forward.
First, the Fed’s newest price assertion is approaching Wednesday, with excessive expectations that the FOMC will maintain the focusing on Fed Funds vary between 5.25% – 5.50%. Now, with the latest U.S. knowledge signaling each robust financial progress situations and sticky inflation, there’s a chance the Fed will proceed the hawkish rhetoric (i.e., open to additional hikes, “greater for longer rates of interest”), which might attract additional recession hypothesis and threat aversion conduct.
A extra hawkish Fed would seemingly spark extra weak spot in equities, particularly the tech heavy Nasdaq 100 Index, who’re often vulnerable to rising rate of interest expectations.
Second, the struggle between Israel and Hamas is more likely to escalate this week as Israel ramps up its assaults on Hamas in Gaza. This not solely raises the chance of extra civilian casualties within the densely populated metropolis of Gaza, but additionally makes it more durable for the battle to be contained with Arab states and the U.S. extra more likely to be drawn in as time rolls alongside. A chronic struggle appears to be the more than likely situation for the time being, particularly with Israeli Prime Minister Benjamin Netanyahu making it clear at the moment that Israel wouldn’t conform to a ceasefire.
Lastly, the earnings season calendar is laced with some bangers this week, most notably Apple earnings, an organization whose worth is roughly 11% of the Nasdaq 100. A beat or miss in earnings there’ll seemingly get merchants shifting on NAS100, so their earnings report on Thursday will certainly get dealer hitting purchase and promote buttons, relying on the earnings name.
We’re at the moment leaning bearish because of the excessive chances of a hawkish Fed assertion on Wednesday holding bond yields elevated, rising geopolitical threat lifting threat aversion sentiment, and the bearish worth momentum on the chart above.
Presently the market is bouncing, but when bearish patterns type across the robust technical space of curiosity (falling shifting averages, Fibonacci retracment, damaged help space), that macro / geopolitical situations mentioned above maintain, and if merchants are upset with Apple earnings, then NAS100 might attract sellers this week.
And if that’s the case, and given the day by day Common True Vary (ATR) of round 260 factors, then a momentum transfer decrease might take the index again to the Oct. 26 low and past, probably the S1 Pivot help space earlier than the tip of the week.
After all, if Apple and the remainder of the tech sector hits the market with robust earnings, and/or optimistic developments emerge on the geopolitical entrance, then the present bounce might get to the R1 Pivot resistance degree on the chart, breaking above the robust technical space of curiosity.
A sustained bullish break there and optimistic threat setting might immediate merchants to push NAS100 as excessive because the 15,000.00 degree by the tip of the week.
So, keep in your toes with Nasdaq 100 and be able to make strikes as a result of this Index loves to maneuver. Await one of the best setups and which ever path you select, keep in mind to apply correct threat administration always!
This content material is strictly for informational functions solely and doesn’t represent as funding recommendation. Buying and selling any monetary market includes threat. Please learn our Threat Disclosure to ensure you perceive the dangers concerned.
