The Nasdaq 100 has turned negative after posting initial gains this Thursday, as markets digest the initial jobless claims data. Despite a slight drop in the numbers, millions of people are still filing for benefits despite all the stimulus packages put out by the US government. Several market analysts, including those at UniCredit, are concerned at the slow pace of improvement in the initial jobless claims numbers, which continue to remain in the 7-digit territory despite a steady stream of stimulus money.
As coronavirus cases continue to ratchet higher in several US states, there are genuine fears that new lockdowns could force more job losses and worsen the unemployment situation in the US.
Markets are also reacting negatively to the Supreme Court decision that has opened the door for the US President’s secretive tax returns to be made public. The Nasdaq 100 is currently trading at 10,616.5, or 0.63% lower as markets start to react negatively to the market fundamentals of the day.
Technical Outlook for Nasdaq 100
The Nasdaq 100 staged a recovery yesterday that enabled it to touch off the upper border of the ascending channel without breaking above it. This channel remains relevant to the price structure on the daily chart. Today’s bearish price action is manifesting as a down candle of rejection at the upper channel border. If this pullback continues, the 10307.3 former all-time high that now functions as support will become the first downside target. A further decline brings in 10156.5 into the equation, with further downside support levels at 9867.1 and 9730.2. The last two downside targets will only become relevant if the price breaks down the channel.
On the flip side, a bounce off 10307.3 allows the Nasdaq 100 make another run to the upper border, where a breakout will see the index posting new all-time highs, above today’s record high of 10758.2. 10843.6, which is the 261.8% Fibonacci extension from the 10 March to 23 March price move, could become a new upside target.
Nasdaq 100 Daily Chart