The index closed the third quarter deeply in bear territory, with an approximately 35% slump from its December record highs, since the tech sector is particularly vulnerable to the current high interest rates environment. The new quarter started with a brief relief-rally on optimism for a less aggressive Fed due to recession prospects, but things quickly changed, as those hopes proved vein.
The central bank runs its most aggressive rate-hike cycle in at least three decades, showing no inclination to slowdown. Over the last few days, officials reasserted their hawkishness and singular focus on restoring price stability, while Friday's strong employment report supports this strategy.
NAS100 enters its sixth straight losing day and slides to fresh two-year lows, which exposes it to 10,495. Further slump below 10,089 though, may prove elusive in the near-term.
On the other hand, the Relative Strength Index (RSI) hovers close to oversold levels, which may support NAS100 and give it the chance to react towards 11,354. However, it does not inspire confidence for more at this stage and the broader 11,670-12,000 region looks unhospitable, as it contains key resistances.
Markets now turn to Wednesday's Fed minutes and Thursday's CPI Inflation update, which can determine the next leg of the move.
Furthermore, the latest earnings season gets underway over the next days, with big names from the banking sector reporting this Friday. The tech sector comes into the forefront next week, with streaming leader Netflix and EV giant Tesla Motors Inc standing out.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.