FundamentalOverview

The Nasdaq sold off prettyaggressively on Friday following the weak US Flash Services PMI and later the Final UMich ConsumerSentiment survey where the long-term inflation expectations jumped to a new 30-year high.

The bulk of the selloffcame after the jump in the long-term inflation expectations. The market mightbe fearing that in case we get a slowdown, the Fed might not be fast enough incutting rates amid inflation remaining above target and uncomfortably highlong-term inflation expectations.

Of course, one single datapoint might not be enough to get a bigger correction in the stock market,especially since it’s from the University of Michigan survey and since we areabout to see a tick lower in the Core PCE Y/Y rate to 2.6% on Friday.

Nonetheless, this issomething to keep in mind in light of the next NFP and CPI reports coming outbefore the March FOMC decision where we will also get the updated SEP and DotPlot.

NasdaqTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that the Nasdaq couldn’t extend the rally above the key 22111 resistance and eventually sold offfollowing the bad economic data. The sellers will likely continue to target the20990 support, while the buyers will look for the price to rise back above thekey resistance to increase the bullish bets into new highs.

Nasdaq TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that the bearish momentum increased following the break of the upward trendline as the sellers piled in moreaggressively. From a risk management perspective, the buyers will have a betterrisk to reward setup around the 21430 support to position for a rally into newhighs, while the sellers will look for a break lower to increase the bearishbets into the 20990 level next.

Nasdaq TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee that we have the most recent lower low around the 21955 level that couldact as resistance. If the price pulls back into it, we can expect the sellersto step in with a defined risk above the level to position for a drop into the21430 support. The buyers, on the other hand, will look for a break higher toincrease the bullish bets into new highs. The red lines define the average daily range for today.

Upcoming Catalysts

Tomorrow we have the US Consumer Confidencereport. On Thursday, we get the latest US Jobless Claims figures, while onFriday we conclude the week with the US PCE data.