Nasdaq 100 Levels to Consider Ahead of the US Elections

Summary:

Nasdaq 100 levels to consider ahead of the US election day. The index forms a triangle that may act as a continuation or a reversal pattern.

As we enter the final hours ahead of the all-important election day in the United States, the Nasdaq 100 reflects what the US stock market did in the last months – consolidation. More precisely, the tech index hovers around the highs, unable to make a decisive move neither higher nor lower.

The Nasdaq 100 index seems to have formed a triangular pattern that may act both as a reversal and a continuation pattern. If it acts as a continuation, then traders should wait for a break of the upper trendline. If, on the other hand, it acts as a reversal, then the break of the previous higher low is key for future developments.

All Eyes on the US Elections Outcome

For the moment, the stock market is unlikely to make any decisive moves. With only one day until the election starts, it might take a while until the markets find out who will sit at the White House for the next four years.

Also, the Presidential vote is one thing, but the battle for Congress is also important. Depending on if a “blue wave” or a “red wave” comes, different stimulus programs will impact the American economy in the months ahead.

It may very well be that the winner of this week’s election will not be known until many days later. In some scenarios, we may even have weeks passing without a winner. One thing is for sure – the sooner the uncertainty about the elections goes away, the better for financial markets.

Nasdaq 100 Technical Levels

The technical picture on Nasdaq 100 shows a contracting triangle. After the index posted a new all-time high right at the beginning of September, the index fell over a thousand points in the weeks to follow. However, it recovered every time from the lows, as investors hurried to buy the dip.

Speaking of the “buy the dip” strategy, the 10,000 level is where true support sits for Nasdaq 100. On the upside, a break of the upper trendline in the triangular formation suggests new all-time highs as the market goes for the triangle’s measured move.