The stock market corrects from the highs, and the Nasdaq 100 is one of the indices to show it. After it bounced from dynamic support, it formed an inversed head and shoulders pattern. It recently completed the measured move but did not make a new all-time high yet.
Plenty of reasons exists for the ranges on the stock market to continue. First, the U.S. elections are just two weeks or so ahead. Second, the fiscal stimulus talks are currently stalling, but one cannot rule out an agreement even before the elections. Third, the Nasdaq 100 index keeps the series of higher lows intact. Therefore, it may just consolidate until the U.S. elections, albeit the price action between the extreme levels may be aggressive.
Fiscal Stimulus May Trigger Ample Moves
The focus in the United States is on the U.S. elections outcome and the ongoing fiscal stimulus negotiations. Also, the way the pandemic evolves is a concern in all of the developed world, not only in the States.
So far, Biden is viewed as a favorite in the polls. However, investors remember vividly that four years ago, the polls favored Hillary Clinton all the way until the election day. And then she lost.
Both candidates promised more fiscal stimulus. The only difference is in the size of the program – the bigger, the better for the market, and we are to find out soon just how much the market expects.
Nasdaq Technical Levels to Watch
For the period ahead, the following two-and-a-half weeks are crucial for the stock market. Nasdaq 100 was the stock market leader so far in the year, as the tech companies were one of the most profitable during the pandemic.
A quick look on the Nasdaq 100 chart, and we clearly see two levels of significant importance for the weeks ahead – the 10,800 to the downside and the 12,400 to the upside. Only a break of these levels will switch the focus ahead of the U.S. elections.
Nasdaq 100 Big Picture