Last
week, the US CPI came
basically in line with expectations, but the good news is that the Core M/M
reading once again printed at 0.2% or 0.16% unrounded. The not so good news is
that the US Initial Claims spiked
higher coming at 248K vs. 230K expected, but Continuing Claims remained strong.
We have already seen Claims spiking higher in the past months, but the overall
picture remains positive for now. The long-term inflation expectations in the University of Michigan report
ticked lower, so on the data side the week was positive. Nonetheless, the
Nasdaq Composite finished the week negative and it’s hard to find a clear
reason other than a technical pullback or global growth worries.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq
Composite was diverging with the
MACD while
approaching the key 14649 resistance and this
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we are still in the pullback scenario as the price is
now at a key trendline where we
should expect the buyers stepping in and target the 14649 resistance. If the
price breaks lower, we might be in front of a reversal and the sellers are
likely to pile in aggressively to extend the selloff into the 13174 support.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price has
recently broke a key support level and extended the fall into the trendline.
The current momentum is undoubtedly bearish as we can also see from the price
printing lower lows and lower highs and the moving averages being
crossed to the downside. The next big move is likely to be decided here at the
trendline.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
have another divergence with the MACD but this time it’s supporting the bullish
case. In fact, this might be an extra confirmation for the buyers that we are
about to see a bounce as the bearish momentum is waning. More conservative
buyers may want for the price to break above the top trendline of the channel
and the 13850 support turned
resistance.

Upcoming
Events

This week is a
bit empty on the data front and the lower summer liquidity might trigger false
moves. On Tuesday we will see the latest US Retail Sales report where the
market is likely to react positively in case of a beat and negatively in case
of a miss. The US Jobless Claims on Thursday is likely to be the main event of
the week as another big miss may cause recessionary fears and weaken the market
even more, while strong data should give the Nasdaq Composite some support.