The Markets Await The Words Of Jerome Powell After The Senate

 

After a mixed market close in the United States, with a slight rise in the Dow Jones index of 0.09% and with falls in the SP500 and the Nasdaq of 0, 77 and 2.46% respectively, the markets are eagerly listening to Jerome Powell in the Senate during the session today and tomorrow.

Yesterday’s falls in the Nasdaq and in the SP500 adds to the decreases of last week after the bad unemployment and unemployment request data after marking all-time highs in the US indices in the first half of February.

These falls are particularly hitting the technology sector, and is, therefore, are being reflected more strongly in the Nasdaq index with falls of 8.66%, 2.98% and 2.68% in Tesla, Apple, and Microsoft respectively yesterday.

These falls contrast with the strong rises that have been experiencing in highly punished stocks such as the case of airlines, where we are seeing strong rises of over 20% in IAG during the month of February, which could be interpreted not only as a correction, but as a possible rotation to other sectors if this trend continues.

The latest declines on the Nasdaq may cause this February to close practically flat after it loses its support levels with force, including the 61.8% fibonacci retracement level and the break of the bullish channel that has been following since last November, which may lead to the origin of the last upward momentum at the beginning of the month. 

As we can see on the daily chart, the loss of this support level could lead the price to its previous resistance level, which currently acts as the main support level in the red band.

(Click on image to enlarge)

Source: Admiral Markets MetaTrader 5. NQ100 daily chart. Data range: from July 2, 2020 to February 23, 2021. Prepared on February 23, 2021 at 12:20 CET. Keep in mind that past returns do not guarantee future returns.

If we look closely at the chart of the NQ100 in H4, we can see that in the short term the falls could continue to continue, since the price has not only broken with force its average of 200 (in red) after the bearish crossing of its moving averages short and medium-term (black and orange), but we can see how the MACD indicator grows strongly in negative territory despite the accumulated oversold that we can see in the stochastic indicator in this time frame.

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