The Nasdaq 100 and other US markets look set to post a 4th straight day of gains, albeit on a muted tone, as the Fear and Greed index pulls back from last week’s highs. Last week, the Fear and Greed Index rallied to 66.0, the highest it has been since the market collapse started in February and peaked in March 2020.
The Nasdaq 100 index is up by 0.11% and currently trades at 9983.5. However, trading remains muted for the day, and the upside may be capped as lack of risky sentiment following a surge of coronavirus cases in 6 US states to record highs introduced an element of market fear.
The Fear and Greed Index has retreated from last week’s highs to the 52.0 level. The 14-point drop in the index from last week’s high underscores the fear element that started to set in as a new wave of coronavirus cases hit several countries.
The Nasdaq 100 trades at 10,011.50 and continues to trade within the ascending channel as it remains on its slow march towards the 10,155 all-time high. Price needs to breach that level to have access to the gateway that leads towards the 10291.5 potential resistance. This price is the 227.2% Fibonacci extension of the wave action from 8442.5 to the March 2020 low at 6615.4.
Failure to breach the all-time high allows the index to stage a pullback towards the 9730.2 support, with 9626.4, 9452.0 and 9264.4 continuing to remain relevant to price action. The channel remains the guiding light for price action even as the upside on the Nasdaq 100 continues.