Will the Nasdaq See Continued Selling?
Interest rates continue to put pressure on risk assets and stocks are sharply off of this year’s highs. While seasonality and high valuations may play a role in this sell off, stocks will continue to trade on inflation and interest rate expectations determined by economic data, and the feds interpretation of said data. Next week’s jobs numbers will be very important to watch for interest rate expectations at the next fed meeting. We will see nonfarm payrolls, the unemployment rate, ADP nonfarm, and average hourly earnings.
With the fundamentals covered, significant support levels will play a part in how we trade moving forward in the tech sector. Looking at the Nasdaq 100 Futures, there is a major gap (identified in blue) from 14530 – 14630. Within this gap territory is also a major support level (identified in yellow) at 14575. After 14575 is the major support level of 14275 (identified in white).
Using these levels will be crucial moving forward. If we were to break the support level of 14575, looking at the bottom of the gap (14530) will be the next support level. As of late, the significant support level of 14575 has held and created a double bottom, which is positive price action in the near term. If the Nasdaq were to break below both of these levels and fill the gap, the 14275 will be the next major level and the 200 day EMA is the last line of defense.
Of course, a close below the 200 day would mean the Nasdaq has entered a bear market. As yields remain a major headwind, these levels should provide context to help a trader navigate the uncertain economic conditions moving forward. The CME Fed Watch Tool is a great way to view interest rate expectations.
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/ Disclaimers: CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. Futures trading involves substantial risk of loss and may not be suitable for all investors.
Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
With the fundamentals covered, significant support levels will play a part in how we trade moving forward in the tech sector. Looking at the Nasdaq 100 Futures, there is a major gap (identified in blue) from 14530 – 14630. Within this gap territory is also a major support level (identified in yellow) at 14575. After 14575 is the major support level of 14275 (identified in white).
Using these levels will be crucial moving forward. If we were to break the support level of 14575, looking at the bottom of the gap (14530) will be the next support level. As of late, the significant support level of 14575 has held and created a double bottom, which is positive price action in the near term. If the Nasdaq were to break below both of these levels and fill the gap, the 14275 will be the next major level and the 200 day EMA is the last line of defense.
Of course, a close below the 200 day would mean the Nasdaq has entered a bear market. As yields remain a major headwind, these levels should provide context to help a trader navigate the uncertain economic conditions moving forward. The CME Fed Watch Tool is a great way to view interest rate expectations.
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/ Disclaimers: CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. Futures trading involves substantial risk of loss and may not be suitable for all investors.
Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
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