Nasdaq 100 Forecast: Extremely Bullish as DXY and VIX Retreat

Summary:
• The Nasdaq 100 index rose modestly in the overnight session as investors waited for the upcoming statement by Jerome Powell.

The Nasdaq 100 index rose modestly in the overnight session as investors waited for the upcoming statement by Jerome Powell. It rose to a high of $13,143, which was slightly above this week’s low of $12,876. However, it is still about 19% above the lowest level this year. Meanwhile, the US dollar index (DXY) and the VIX index declined slightly. 

Tech stocks crawl back.

The Nasdaq 100 index has been in a strong rally in the past few weeks as investors buy relatively cheap stocks. Some of the top stocks that have rebounded are companies like Tesla, PayPal, and Apple, which were significantly oversold. Similarly, the index’s recovery also coincided with that of cryptocurrencies.

The next key catalyst for the Nasdaq 100, S&P 500, and Dow Jones will be the upcoming statement by Jerome Powell at the Jackson Hole Symposium. This will be an important statement considering that it will set the tone of what to expect in the coming meetings.

Fed members who spoke on Monday insisted that the bank will continue hiking interest rates in the coming months in a bid to fight the soaring inflation. Analysts expect Powell to embrace the same tone and hint that more hikes were necessary.

The DXY index, which tracks the performance of the US dollar, has rebounded from this week’s low of $108.08 to $108.52. Nasdaq has an inverse relationship with the greenback. The same is true with the VIX index, which has retreated by about 12% from its highest point this week. Meanwhile, the fear and greed index is still at the neutral point of 40.

Nasdaq 100 forecast

The four-hour chart shows that the Nasdaq 100 index pulled back slightly this month. It dropped from a high of $13,710 to a low of $12,876. This was an important support level considering that it was the highest point on June 1. It is a sign that the index has formed a break and retest pattern. The index has moved slightly above the 25-day and 50-day moving averages. 

Therefore, there is a likelihood that the index will continue rising as bulls target the important resistance at $13,710, which was the highest point this week. A drop below the support at $12,600 will invalidate this view.