Nasdaq Technical Analysis – We only had a pile of negative news this week

Fundamental Overview

The Nasdaq extended the selloff yesterday following fresh Trump’s tariffs threats and especially additional 10% tariffs on China. The market has been under pressure ever since last Friday when we got the weak US Flash Services PMI and later the jump to a new 30-year high in long term inflation expectations in the Final UMich Consumer Sentiment survey.

The bulk of the selloff came after the jump in the long-term inflation expectations though. The market might be fearing that in case we get a slowdown, the Fed might not be fast enough in cutting rates amid inflation remaining above target and uncomfortably high long-term inflation expectations. Trump’s tariffs threats add to expectations of a slowdown in growth.

March will be a great month for traders because we will probably have the most important NFP and CPI reports of the year ahead of the March FOMC decision where we will also get the updated SEP and Dot Plot. The markets will need benign data on the employment front coupled with easing inflationary pressures to trigger a rally. Conversely, bad data coupled with higher inflationary pressures might even lead to a new bear market.

Nasdaq Technical Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq dropped below the lowest price of the range that we had since December. The sellers might increase the bearish bets to extend the selloff into the major trendline. The buyers, on the other hand, will want to see the price rising back above the 20705 level to start piling in for a rally into the all-time highs.

Nasdaq Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a downward trendline defining the bearish momentum. If the price pulls back into it, we can expect the sellers to lean on the trendline to position for another selloff into the major trendline. The buyers, on the other hand, will look for a break higher to gain more conviction and increase the bullish bets into a new all-time high.

Nasdaq Technical Analysis – 1 hour Timeframe

On the 1 hour chart, there’s not much we can add here as the sellers will likely pile in here with a defined risk above the 20705 level, while the buyers will look for a break higher to start targeting the downward trendline. The red lines define the average daily range for today.

Upcoming Catalysts

Today we conclude the week with the US PCE data.