2022/02/16 (004) Technical Analysis – NDX

WallStreet reins in losses, last days!
NASDAQ 100 meanwhile 13% down for the year,
so that i dare to formulate a bearish trading capability…


The Ukraine crisis and or maybe much more the turnaround in interest rates are constantly changing on the stock exchanges. Interest rate concerns dominated again today. Although the West has doubts about the troop movements away from the Ukrainian border announced by Moscow, this news was gratefully received on the stock exchange. In the afternoon, however, the interest rate issue returned with power. A whole raft of new economic data from the USA fueled concerns about a sharper stance by the US central bank. On Wall Street, prices initially came under more pressure. However, after the minutes of the US Federal Reserve’s most recent monetary policy meeting were published, the standard values of the Dow Jones were able to limit their losses significantly to 0.16 percent. The Nasdaq-100 technology index closed 0.12 percent lower.

With an increase of 2.0 percent on the previous month, import prices rose more than they had since April 2011. Although the problem of disrupted supply chains is well known, economists were surprised by the dynamics of the price increase. Also, higher-than-expected US retail sales and robust industrial production in January bolstered market participants’ expectations of rapidly rising interest rates. It will soon be appropriate to raise the base rate, which is at zero, according to the minutes. The reasons given are high inflation and the robust labor market. Monetary policy committee members also signaled a faster pace of tightening than in the last dovish phase of rate hikes starting in 2015. Nevertheless, Wall Street took the minutes reasonably well. According to the analysis house Pantheon, the stance of the central bankers is not quite as tight as one might have expected. Analysts at Capital Economics pointed out that speculation of a large rate hike in March would not be confirmed by the minutes.

The relaxation of the actuality corona rules decided by the federal and state governments was noted benevolently. However, the pandemic had only played a minor role on the stock exchange given the falling number of severe cases.

Fed Likely to Raise Rates Next Month
Fed policymakers reinforced it would soon be appropriate to raise the target range for the federal funds rate and most participants suggested that a faster pace of increases than in the post-2015 period would likely be warranted, should the economy evolve generally in line with expectations, minutes from last FOMC meeting showed. The Fed stressed that the appropriate path of policy would depend on economic and financial developments and their implications for the outlook and the risks around the outlook, and the appropriate setting for the policy stance will be evaluated at each meeting. Still, if inflation does not move down as expected, it will be appropriate to tight monetary policy at a faster pace. The Fed will also continue to reduce the monthly pace of net asset purchases, bringing them to an end in early March.

US Stocks End Mixed after FOMC Minutes
US stocks closed mixed on Wednesday, with the Dow down 53 points after shedding as much as 300 earlier in the session, Nasdaq declining by 0.1%, and the S&P 500 crossing over into positive territory as investors were digesting FOMC meeting minutes, latest data and geopolitical tensions. The minutes showed the Fed is ready to raise rates and shrink the balance sheet as soon as March as expected. On the data front, retail sales jumped 3.8% mom in January, more than estimated and rebounding from an upwardly revised 2.5% drop in December. Meanwhile, geopolitical tensions kept markets in check. Inthe most recent developments, NATO officials accused Russia of concentrating troops at the Ukrainian border a day after Moscow insisted they had withdrawn some forces.

US 10Y Bond Yields flat
after Hitting 30-Month High
The yield on the benchmark US 10-year Treasury note briefly hit a thirty-month high of 2.0645% before trimming gains to trade around 2.04%, as investors monitored the FOMC minutes from the Fed’s most recent meeting. According to the minutes, policymakers strongly signaled a rate hike as soon as next month and layed out procedures on how to taper the central bank’s $9 trillion balance sheet, which mostly consists of bonds. Additionally, the FOMC sees as likely both a faster tapering and a quicker pace of interest rate hikes than in the period between 2014 and 2019, if the economy continues to evolve mostly in line with the committee’s predictions. Prior to the minutes release, market participants were forecasting a 50 bps rate hike in March. Russia-Ukraine geopolitical concerns linger as NATO said today it has not seen any de-escalation of Russian troops on the ground, contradicting the Kremlin’s claims on Tuesday.

NASDAQ 100 down 13% for the year
It’s only February, so the magnitude of that decline has some investors concerned, especially since many individual tech stocks have been plunged into bear market territory, losing 20% (or more) of their value. But history highlights the benefits of taking a long-term approach for the best investment results. After all, over the last 10 years, the Nasdaq 100 has returned 4,515%. In other words, a $10,000 investment in February 2012 would be worth $451,500 today. For that reason, the recent decline might be an opportunity to buy these three stocks at a discount, with a focus on holding for the next decade (or longer).

NASDAQ 100 tests Bitcoin support
Following Tuesday’s 2.53% breakout, the NASDAQ 100 slipped by a modest 0.11%. Upbeat retail sales figures from the U.S and the FOMC meeting minutes provided support. The FOMC meeting minutes were less hawkish, with the FED planning to assess inflation and monetary policy at each meeting. Ongoing concerns over a possible Russian invasion of the Ukraine, however, left the NASDAQ 100 in the red.For the day ahead, news updates from Russia and the U.S will need continued monitoring. On the economic data front, U.S jobless claims will also provide the U.S markets with direction later in the day.

Basically, I’m assuming a slow, but nerve-wracking, i.e. more than grueling, bear market. And that until at least the summer of this year. And that regardless of the Russia-Ukraine conflict. But rather because of the emerging inflation concerns