Greetings buying and selling fiends! It’s going to be a busy week for equities with central financial institution occasions and earnings experiences forward!
Will the volatility and fundies draw extra sellers into the downtrend on NAS100, or will the bulls defend and push increased?
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 appears to be like like volatility isn’t able to die down but with the shut of October as this week’s checklist 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 conflict, and extra tech earnings forward.
First, the Fed’s newest charge assertion is approaching Wednesday, with excessive expectations that the FOMC will maintain the concentrating 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 risk the Fed will proceed the hawkish rhetoric (i.e., open to additional hikes, “increased for longer rates of interest”), which may attract additional recession hypothesis and threat aversion conduct.
A extra hawkish Fed would possible spark extra weak point in equities, particularly the tech heavy Nasdaq 100 Index, who’re normally prone to rising rate of interest expectations.
Second, the conflict 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 probability of extra civilian casualties within the densely populated metropolis of Gaza, but additionally makes it harder 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 protracted conflict appears to be the most probably state of affairs in the meanwhile, particularly with Israeli Prime Minister Benjamin Netanyahu making it clear at this time that Israel wouldn’t comply with 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 possible 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 conserving bond yields elevated, rising geopolitical threat lifting threat aversion sentiment, and the bearish worth momentum on the chart above.
At the moment the market is bouncing, but when bearish patterns type across the robust technical space of curiosity (falling shifting averages, Fibonacci retracment, damaged assist space), that macro / geopolitical eventualities mentioned above maintain, and if merchants are dissatisfied with Apple earnings, then NAS100 could 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 could take the index again to the Oct. 26 low and past, doubtlessly the S1 Pivot assist space earlier than the tip of the week.
In fact, 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 could get to the R1 Pivot resistance stage on the chart, breaking above the robust technical space of curiosity.
A sustained bullish break there and optimistic threat surroundings may immediate merchants to push NAS100 as excessive because the 15,000.00 stage 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. Watch for one of the best setups and which ever path you select, bear in mind to apply correct threat administration always!
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