The tech-heavy Nasdaq 100 index, but other indices as well, have been falling since last Monday’s (October 19) massive rally. What’s going on?
Basically, nothing new. Markets had been hoping for a swift agreement between Democrats and Republicans on the new fiscal stimulus. However, negotiations have been going nowhere over the previous weeks; thus, frustrated investors started selling stocks.
Late on Wednesday, Trump criticized Democrats for their inability to compromise over the size of the stimulus. That looks like another stale-mate, and the aid package might not be approved till the elections after all.
While Trump had previously said he was willing to accept a larger aid bill, it was clear that there was also deep opposition among Senate Republicans to such a massive stimulus bill amid worries that it could hurt their November election prospects by adding to rapidly rising budget deficits.
There is also the rising COVID cases situation, but markets have been ignoring that for a long time now. More lockdowns are bullish for tech stocks; therefore, Nasdaq should rise in this environment.
The technical situation is a bit neutral, though. The Nasdaq 100 index dropped to its previous highs/lows area (as shown on the chart), which is the key level for traders. While above, the medium-term trend still seems long.
Therefore, the actual dip could be bought at the essential support, an excellent trading strategy. The index could rise toward 11,800 USD and afterward to 12,000 USD.
Alternatively, if the index closes on the daily chart below the support line near 11,600 USD, the trend might switch to bearish, targeting the 11,000 USD level.
✔️For more market news articles like this visit Axiory Intelligence.
Peter Bukov | Market Analyst
Peter comes from a background in corporate finance which began in 2013 when he completed the Corporate Finance Program at the University of Economics in Bratislava. He’s been actively involved in the market sector since 2008 and got his hands-on experience in trading in 2011.
His experience in finance and trading continues not only as a market analyst at Axiory Intelligence but also through his studies to obtain a degree in Capital Markets. The study is in line with MIFID II regulations and is under the supervision of the European Regulator ESMA, which strongly emphasizes ethics and morale in investing and working with a client.
In addition, Peter was awarded the title of ASCI from the CISI Educational Institute of England where he is an associate member and the Bloomberg Aptitude Test results ranked him among the top 4% worldwide two years in a row.
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