Nasdaq Bulls Maintain Upward Trajectory Ahead of US Data, Fed Speakers

Nasdaq 100 (US Tech) Evaluation

Traditionally, March presents a difficult month for the Nasdaq in an election yr however tends to witness spectacular full yr gainsNasdaq posts a sluggish begin to the week forward of financial dataMajor danger occasions within the week that lies forward: companies PMI, Fed speak and NFPThe evaluation on this article makes use of chart patterns and key help and resistance ranges. For extra info go to our complete schooling library

March Insanity: Nasdaq Tends to Underperform in March Throughout Election Years

With the presidential race effectively underneath method, it could be helpful to see how the tech-heavy Nasdaq has carried out in March in prior election years when the incumbent president was up for reelection. The info doesn’t make for good studying as March usually represents the second worst month of the yr (rating eleventh out of 12 months) and sees a median decline of 1.6% for the month, in line with knowledge going again to 1950.

Supply: Knowledge courtesy of @AlmanacTrader, desk recreated by Richard Snow

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Nasdaq posts a sluggish begin to the week forward of key financial knowledge

The Nvidia hype has propelled the Nasdaq greater at the beginning of a month that has traditionally proved to be a drag on the index in prior election years. Whereas prior knowledge could also be insightful, the primary level of consideration ought to at all times be worth motion.

The index has supplied short-lived pullbacks which served as alternatives to reenter the bullish development. Final week, worth motion broke and closed above the prior zone of resistance round 18,100. The 50-day easy shifting common (SMA) has lagged behind bullish worth motion however has supplied a dynamic help because the bullish development continues.

18,100 stays related within the occasion a short-term pullback transpires, particularly after Apple was handed with a $2-billion effective over anti-trust breaches within the EU. Momentum seems effectively intact because the MACD indicator trades above zero whereas the RSI flirts with overbought territory.

Nasdaq Every day Chart (US Tech 100)

Supply: TradingView, ready by Richard Snow

Main Danger Occasions within the Week Forward

This week there’s a notable quantity of Fed communication, as officers present their takes on the US financial system earlier than the media blackout commencing this Saturday. Amongst the audio system is Jerome Powell as he prepares to testify in entrance of congress on Wednesday and Thursday. Financial knowledge has been robust usually, however Friday’s US manufacturing knowledge supplied a possible signal of concern as a result of decrease transfer within the ‘new orders’ sub-index. New orders are usually seen as a forward-looking indicator which is able to seemingly shift the main focus to tomorrow’s companies PMI knowledge for affirmation.

Then, on Friday, US non-farm payroll knowledge is predicted to point out an addition of 200,000 jobs having been added in February – which might add to the latest development of robust jobs knowledge. The unemployment price can be anticipated to carry agency at 3.7%, effectively beneath the theoretical pure price of unemployment which is claimed to be round 4.4%.

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— Written by Richard Snow for DailyFX.com

Contact and observe Richard on Twitter: @RichardSnowFX