Nasdaq started the week in a positive mood as US-China talks mounted hopes of a November interim deal. The trade talks outlook remains volatile as both sides give and take. Larry Kudlow in an interview said USA could cancel the December tariffs if trade negotiations were to continue to go well with China. The IMF lowered its 2020 forecast for China’s GDP to 5.8% last week. Investors now increasing their bets for a cut by Fed later this month, they see an 85% chance of the Fed to lower interest rates in late October; that will be supportive for equities.
The Dow Jones Industrial Average started 0.02% higher at 26,779, while the S&P 500 trading 0.42% lower at 2,998. The CBOE Volatility Index (VIX) adds 0.13% today at 14.38 to confirm the quiet market mood.
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Nasdaq Support and Resistance
Nasdaq short term positive momentum is intact despite the Friday’s correction supported by its long-term uptrend as the index trades inside the ascending trend channel which started early 2019. Nasdaq managed to re-enter the ascending channel last week giving bulls the upper hand. On the upside, first resistance stands at 8,151 the daily high and then at 8,182 the high from October 17th. Traders looking to enter long positions could buy if the index manages to close above today’s high (8,151), targeting a move above 8,200. On the downside, immediate support stands at 8,117 today’s low, then at 7,664 the low from August 5th, while more bids will emerge at 7,300 lows from May. A short position might be initiated if the index settles below the 100 day moving average at 8,004.