Nasdaq 100 (US Tech) Evaluation

• Traditionally, March presents a tough month for the Nasdaq in an election yr however tends to witness spectacular full yr beneficial properties
• Nasdaq posts a gradual begin to the week forward of financial information
• Main danger occasions within the week that lies forward: providers PMI, Fed discuss and NFP
• The evaluation on this article makes use of chart patterns and key help and resistance ranges. For extra data go to our complete training library

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

With the presidential race effectively underneath manner, 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 information doesn’t make for good studying as March sometimes represents the second worst month of the yr (rating eleventh out of 12 months) and sees a mean decline of 1.6% for the month, in keeping with information going again to 1950.

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

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Nasdaq posts a gradual begin to the week forward of key financial information

The Nvidia hype has propelled the Nasdaq greater at first of a month that has traditionally proved to be a drag on the index in prior election years. Whereas prior information 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 shifting common (SMA) has lagged behind bullish worth motion however has supplied a dynamic help 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 superb 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 Each day Chart (US Tech 100)

Supply: TradingView, ready by Richard Snow

Main Threat 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 information has been sturdy usually, however Friday’s US manufacturing information supplied a possible signal of concern as a result of decrease transfer within the ‘new orders’ sub-index. New orders are sometimes seen as a forward-looking indicator which is able to possible shift the main focus to tomorrow’s providers PMI information for affirmation.

Then, on Friday, US non-farm payroll information is predicted to indicate an addition of 200,000 jobs having been added in February – which might add to the latest pattern of sturdy jobs information. The unemployment price can also be anticipated to carry agency at 3.7%, effectively under the theoretical pure price 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