The Nasdaq 100 is trading higher after today’s NFP numbers were better than the market expected. Despite showing a negative employment change of 20.5million, a figure not seen since the Great Depression era, the Nasdaq 100 was buoyed by the fact that the numbers were not as bad as market analysts had expected. Furthermore, top trade officials from the US and China have recommitted to implementing the Phase 1 agreement of last year. This information, which came from a Reuters report, seems to have calmed investors who were initially nervous about the threat of new trade sanctions made by US President Trump a week ago.
The Nasdaq 100 index is trading 0.57% higher on the day and has approached the 9264.4 harmonic pattern target. There is a consensus that the coronavirus-induced jump from 50-year lows in the unemployment rate to >70-year highs in the unemployment rate is a temporary event, precipitated by the lockdowns and enforced closures of businesses and factories. As state economies start to re-open, a substantial reduction in the unemployment rate may be on the works, which boosts investor optimism.
The Fear and Greed Index has climbed from 42 to 44, which marks a further reduction in fear and a tilt towards the greed side of the equation as public participation increased.
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Technical Outlook for Nasdaq 100
The Nasdaq 100 finally breached the critical 8942.7 resistance in yesterday’s move, which also took the index above the initial target at 9092.3 and terminated at the 9264.4 resistance. This resistance is where point D of the crab harmonic pattern resides.
Today’s candle has assumed the shape of a pinbar, following intraday rejection at 9264.4. If the price rejection which forms the pinbar prevents a break of 9264.4, the Nasdaq 100 may see a reversal at point D, which fulfils the traditional expectation of the harmonic pattern. This scenario could initiate further downside that retests previous resistance areas at 9167.4, 9092.3 and 8945.7, now acting as support levels.
If the Nasdaq 100 continues its advance to the point of breaking above 9264.4, this move would have a new target at 9452.0 (previous highs of 5/6 February). This move would also invalidate the harmonic pattern.