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 positive aspects
- Nasdaq posts a sluggish begin to the week forward of financial knowledge
- Main danger occasions within the week that lies forward: providers PMI, Fed speak and NFP
- The evaluation on this article makes use of chart patterns and key assist 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 properly underneath approach, it might 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 information 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 accordance 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 larger in 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 all the time be worth motion.
The index has supplied short-lived pullbacks which served as alternatives to reenter the bullish pattern. Final week, worth motion broke and closed above the prior zone of resistance round 18,100. The 50-day easy transferring common (SMA) has lagged behind bullish worth motion however has supplied a dynamic assist because the bullish pattern continues.
18,100 stays related within the occasion a short-term pullback transpires, particularly after Apple was handed with a $2-billion high-quality over anti-trust breaches within the EU. Momentum seems properly intact because the MACD indicator trades above zero whereas the RSI flirts with overbought territory.
Nasdaq Day by 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 economic 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 because of the decrease transfer within the ‘new orders’ sub-index. New orders are usually seen as a forward-looking indicator which is able to doubtless shift the main focus to tomorrow’s providers PMI knowledge for affirmation.
Then, on Friday, US non-farm payroll knowledge is anticipated to point out an addition of 200,000 jobs having been added in February – which might add to the current pattern of robust jobs knowledge. The unemployment fee can also be anticipated to carry agency at 3.7%, properly under the theoretical pure fee of unemployment which is alleged to be round 4.4%.
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— Written by Richard Snow for DailyFX.com
Contact and observe Richard on Twitter: @RichardSnowFX