The Nasdaq (NAS100) daily, on the left, has capitulated into its bearish area between the lower blue and lower red bands. The red Bollinger bands have moved in opposite directions, which suggests an expansion in volatility. If the daily stochastic drops below 20 (aqua arrow) and holds there, it will denote an underlying bearish momentum. This will put pressure on the index and the odds will favour further declines. The hourly chart on the right shows that the NAS100's RSI has dropped below its lower threshold (aqua rectangle). This implies that the index is oversold in the short term. However, any rallies may be targeted by shorts given the weak daily timeframe. The Nasdaq being a growth index is feeling the pressure from the Fed's hawkish minutes. The prospects of higher interest rates adversely affects the growth side of the market more than the value side due to its time value of money characteristics.
Past Performance: Past Performance is not an indicator of future results.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.