Market Analysis

NASDAQ 100: Testing 2017 highs ahead of Thanksgiving Day

The Organisation for Economic Cooperation and Development (OCDE) warned on Wednesday (Nov 21), that global economy has peaked and faces a slowdown driven by international trade tensions between the US and China, creating price pressures that would force the Federal Reserve (Fed) to step up monetary tightening.

The trade wars have among different variables scared investors, driving them to take profits in sectors such as technology, which has soared over the past decade.

Everyone’s eyes are presently at the G20 meeting that will take place in Buenos Aires, Argentina on the November 30, to see whether the trade deadlock will be settled, stopped, or raised. Merged with rising loan costs, mists over worldwide monetary progress and political pressure somewhere else, investors are anticipating the gathering with a level of anxiety.

Apple, which accounts for 12% of the NASDAQ’s weighting and 5% of the Dow Jones Industrial Average, had its worst week in seven months last week, down 5%, 16% off its recent high. Concerns about disappointing iPhone sales and slower growth led shares to their seventh straight weekly loss, the longest negative stretch for the stock since 2012.

The initial jobless claims in the US rose by 3K to 224K in the week ended November 17th, comparing to the previous week’s upwardly revised data of 221K. The numbers came above analysts’ estimates of 215K.  It was the highest level since the week ending June 30. Claims for North Carolina and Florida continued to be affected by Hurricanes Florence and Michael, respectively.

The continuing jobless claims in the US fell by 2K to 1,668K in the week ended November 10th, comparing to the previous week’s unrevised data of 1,670K. The numbers came above analysts’ estimates of 1,635K. A decrease in this indicator has positive implications for consumer spending which encourage economic growth, representing strength in the labour market.

Since the beginning of 2018 until last Wednesday close, the US Technology index remains positive with a gain of almost 2.7% but since the start of November, dropped nearly 5.7%. Nonetheless, the week began on the left foot with a fall of more than 4.0% and on the daily basis closed green with 0.77% gain. Furthermore, the NASDAQ 100 is in a distribution phase since late October.

On yesterday session, the NASDAQ 100 rose with a narrow range but found enough selling pressure near the 6,647.5 to trim some of its initial gains and closed in the middle of the daily range, in addition, managed to close within Tuesday range, which suggests being clearly neutral, neither side is showing control.

The stochastic is showing an oversold market although is still displaying a strong bearish momentum.

The US Technology index ended October with a slight upward correction that followed through early November. However, the upward correction failed on a key level at 7,214.0 where another wave of bears came out dragging the price back down with enough strength to breach the 6,580.25 level, which is October low. The NASDAQ 100 continues to deliver lower highs and lower lows, all signs of a well-establish bearish trend, although seems to have found some support near 2017 high where it has made an inside day. By analyzing the facts that US index stopped at daily support, is in an oversold zone and made an inside day, we may expect some kind of upward correction, probably toward the daily resistance at 6,994.75.

UsaTec is a CFD written over NASDAQ 100 futures.


UsaTec Dec ’18 Daily Candlestick Chart

UsaTec Dec ’18 Daily Candlestick Chart


Watch out this Week: 

On Thursday, November 22 Thanksgiving Day, is a harvest festival. Traditionally, it is a time to give thanks for the harvest and express gratitude in general. It is primarily a North American holiday, which has generally become a national secular holiday with religious origins. So expect light trading volume on this day.

On Friday, November 23 at 14:45 GMT (09:45 PM ET) the Markit Economics is scheduled to release the preliminary Manufacturing PMI for November, which is expected to expand to 56.0 comparing to the previous 55.7 registered in October. At the same time, the Markit Economics will release the preliminary Services PMI in November, which is expected to come in unchanged at 54.8.

UsaTec is a CFD written over NASDAQ 100 futures.


Written by Hugo O’Neill, External Analyst


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