Nasdaq starts its vacation

6月3日

Mixed results are expected this day as we begin a new trading month and WallStreet indices start with solid gains in the month of May. The S&P500 benchmark is up 17 points or about 0.3%. The Nasdaq Composite was up 156 points (0.9%), and the Dow Jones Industrial Average, composed of 30 top companies, fell 25 points (-0.1%). The PCE data showed a slight cooling of the U.S. economy, which has encouraged the FED to possibly cut interest rates in September. The S&P500 rose 0.8% to 5,277.51 points on Friday, while the Dow Jones rose 0.8% to 38,686.32 points and Nasdaq lagged on weakness in tech companies closing flat at 16,735.02 points.


May nonfarm payrolls are a key data point on Friday. Fed traders' consensus was 47% for a 25 basis point cut in September, in conjunction with a 45% probability that it will maintain its monetary policy according to CME Fed Watch. The central bank is expected to hold rates steady, and Fed officials continue to call for patience with rate cuts looking for evidence of a return to inflation stability on the 2% path. Already last Monday Neel Kashkari of the Minneapolis Fed echoed this by reporting that they could remain unchanged for an “extended” period of time.

If we look at the Nasdaq chart (Ticker AT: USATEC) the fact is that on Friday the first price resistance was pierced at the 18,197 area returning to the support zone of May 23rd. The price bell has generated a price control zone at 18,820 points with a dual bell marking the second lower bell around 18,626 points. The RSI is currently oversold at 41.60%, it will not be uncommon this month to see a price drop to Friday's second resistance zone. And a return to the mean. The truth is that this month can be quite weak in terms of sales in many technology sectors and Nasdaq has been practically dragged down by the Magnificent 7 and not so much by the rest that have barely experienced a palpable growth.

Ion Jauregui - ActivTrades Analyst



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