The Nasdaq 100 futures are heading for the 3rd straight day of losses after the collapse of crude oil prices on the WTI benchmark left US markets shell-shocked yesterday. Investors are still reeling from yesterday’s stunning and dramatic events, which stole the show ahead of earnings reports.
Today, the downgrade of Illumina, as well as Facebook by Deutsche Bank, Mizuho and Raymond James, caused both stocks to lose 4% and 3% respectively, with Facebook already trading with a downside gap. These losses are weighing on the Nasdaq 100. Netflix is due to release its earnings report in the after-hours trading session, but the stock is already trading $7.28 lower in premarket trading. Amazon also finds itself in the losers’ section at the moment, along with Vertex Pharmaceuticals.
Gilead Sciences continues to outperform most stocks on the Nasdaq 100’s gainers list with a 0.54%. eBay and Electronic Arts are also performing well at the moment.
Three days of bearish action has taken the Nasdaq 100 below a key resistance-turned-support level at 8691.0, having seen rejection at 8945.7. Today’s decline takes the Nasdaq 100 futures towards the 8442.5 price support, which had served as a resistance for several weeks before last week’s advance caused it to reverse roles. A further breakdown of this price support targets the 8264.8 and 8160.2 price levels, with the former being the 1.0 Fibonacci level from the previous XA move in the negated W pattern.
A bounce off 8442.5 allows the Nasdaq 100 to retest 8691.0. If this bounce is strong enough, then an advance to retest the 8945.7 is likely. However, any bounce moves on the Nasdaq 100 will have to contend with the risk-off sentiment that is seeing strong US Dollar demand and weaker US market values. Also, PMI readings in Europe and the UK, as well as events in the crude oil market, may continue to dominate sentiment.