The Nasdaq 100 feels the weight of soft earnings and recession fears

Article By: ,  Market Analyst

Despite a strong start, Wall Street indices snapped a 3-day winning streak on Wednesday and handed back early gains just before lunch. Weak earnings guidance from large tech companies weighed on sentiment and served as a harsh reminder that we’re in a bear market. Microsoft (MSFT) and Alphabet (GOOG) shares fell around –8% and -10% respectively, causing concerns that Apple (AAPL) will also report a gloomy outlook later today.

 

Nasdaq 100 daily chart:

The Nasdaq 100 has risen over 11% since its October low, but price action suggests a swing high may have formed. A resistance zone around 11,680 includes the 50-day EMA, 38.2% Fibonacci ratio and previous swing highs, and a bearish pinbar has formed on the daily chart.

Given we are amidst a busy earnings season, we’re not looking for an outlandish move and will be ready for markets to turn one way or another at short notice. But given the Nasdaq’s reluctance to break above resistance ahead of Apple’s earnings, the path of least resistance over the near-term seems to be lower. 11,200 makes a viable initial target ahead of the lows around 11,000 – which also coincides with the June low – a break beneath which brings the month to date (MTD) low into focus.

 

Nasdaq E-mini futures:

Despite the weak close, the Nasdaq 100 is currently set to open around 0.4% higher looking at price action on Nasdaq futures. Yet as prices are only drifting higher the current assumption is this is part of a retracement, and we anticipate a break of yesterday’s lows.

 

 

 

How to trade with FOREX.com

Follow these easy steps to start trading with FOREX.com today:

  1. Open a Forex.com account, or log in if you’re already a customer.
  2. Search for the pair you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

  

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

Contracts for Difference (CFDs) are not available to US residents.

FOREX.com is a trading name of GAIN Capital - FOREX.com Canada Limited, 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA is a member of the Canadian Investment Regulatory Organization and Member of the Canadian Investor Protection Fund. GAIN Capital – FOREX.com Canada Limited is a wholly-owned subsidiary of Stonex Group Inc.

Complaints are taken very seriously at FOREX.com. You can view our complaints procedure here.

Know your advisor

© FOREX.COM 2024