Market Analysis

NASDAQ 100: Optimism triggered by nonfarm payrolls and expectations of better earnings season

The NASDAQ 100 managed to maintain last year’s momentum on the third trading day of 2019 following solid job additions in US private sector and a significant rise in business activity in China. While expectations of better earnings season had a positive impact on investor sentiment.

The Nonfarm payrolls in the US increased by 312K in December 2018, compared to an upwardly revised 176K in November and stronger than analysts forecast of 177K. Job gains happened in health care, food services and drinking places, construction, manufacturing, and retail trade. The December jobs gain pushed total US employment above 150 million jobs for the first time.

Moreover, trade talks with China are taking a turn for the better, especially since a weakening Chinese economy gave Beijing an added reason to work toward a deal, according to US President Donald Trump. The US negotiators are meeting with Chinese counterparts in Beijing to discuss a trade deal this week.

Meanwhile, large parts of the US federal government continue to remain shut down as the impasse over Trump’s demands to build a wall enters its 17th day. While Trump officials continue to debate the merits of the wall Democrats brand ‘immoral’, the fates of some 800,000 government workers continue to be at risk. However, the White House signaled on Sunday that the president was willing to reach a compromise of sorts with the Democrats by proposing a  ‘steel fence’ to replace his initial demand for a ‘big, beautiful wall’.

Top NASDAQ 100 Gainers and Losers last Friday:


  • Netflix (9.72%), JDcom (9.43%), Electronic Arts (7.25%) among the top NASDAQ 100 gainers for the session


  • O Reilly Automotive (-1.25%), Broadcom (0.98%), Henry Schein (0.99%) were among the worst NASDAQ 100 performers of the session


Since the beginning of 2019 until last Friday close, the US Technology index remains positive with a gain of almost 1.3% and since the start of January, rallied nearly 1.3%. Nonetheless, the week ended on the right foot with a rise of more than 1.5% and on the daily basis closed well in the green with 4.22% gain. Nonetheless, the NASDAQ 100 remains in a bearish phase since late November, after the death cross.

On last the Friday session, the NASDAQ 100 initially fell but found enough support near Thursday low at 6,148.75 to trim all of its initial losses and closed near the high of the day, in addition, managed to close above Thursday high, which suggests a strong bullish momentum.

The stochastic is showing a weak bullish momentum and is below the 50 midline.

The US Technology index made a new year-to-date low in December 2018at 5,820.00 but managed to bounce with a strong bullish engulfing pattern although not strong enough to end the month on a positive note. In addition, seems to have jump-started the bulls in early January 2019 by developing other strong bullish engulfing pattern on Friday. A bullish engulfing pattern is seen as the end of the downward correction, marked by the primary candle of downward momentum being overtaken, or engulfed, by a larger secondary candle indicating a shift toward an upward trend. However, the NASDAQ 100 is facing strong resistance that ranges from 6,449.50 up to 6,545.50, with a 50 Fibonacci retracement between the ranges at 6,479.13.

UsaTec is a CFD written over NASDAQ 100 futures.


UsaTec Mar ’19 Daily Candlestick Chart

UsaTec Mar ’19 Daily Candlestick Chart


Market Events to Watch:


January 07, 15:00 GMT (10:00 ET): The US Census Bureau is scheduled to release the US factory orders month-on-month for November 2018, which is expected to rise to 0.7% compared to -2.1% registered in the previous month. This indicator can offer insight into inflation and growth in the manufacturing sector. A high reading is seen as positive for the USD, while a low reading is perceived as negative.

January 09, 19:00 GMT (14:00 ET): The Federal Open Market Committee (FOMC) is scheduled to release its meeting Minutes, which are released by the Board of Governors of the Federal Reserve (Fed) and are a clear guide to the future US interest rate policy.

January 10, 17:00 GMT (12:00 ET): The Federal Reserve (Fed) Governor Jerome H. Powell is scheduled to speak. As head of the Fed, which controls short-term interest rates, he has more influence over the US dollar value than any other person does. Traders closely watch his speeches as they are often used to drop hints regarding future monetary policy.

January 11, 13:30 GMT (08:30 ET): The US Bureau of Labor Statistics is scheduled to release the final figure of the consumer price index (CPI) year-on-year for December 2018, which is expected to come in unchanged at 2.2%, the same as the previous period. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as positive for the USD, while a low reading is seen as negative.


Written by Hugo O’Neill, External Analyst


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