nasdaq
The Nasdaq 100 continues to trade higher for the 2nd daily session in a row, as the uptick in the Fear and Greed Index shows that traders are ready to get greedier and take more risks.
The Fear and Greed Index is trading at 40 today, 2 points higher than the previous close of 38 as the Bank of Japan’s stimulus lifted global markets and the Nasdaq 100 is following suit. Furthermore, the signing of the $484billion stimulus package for small businesses by US President Donald Trump is lifting sentiment on the market, even as more states in the US mull easing of the lockdowns in their territories.
The Nasdaq 100 is 1.17% higher on the day, trading at 8874.4 as it continues to pursue a move that breaks the 8945.7 resistance.
Download our Q2 Market Global Market Outlook
Today’s advance resumes the quest to breach the resilient 8945.7 resistance level. A move above this level has so far proven elusive. In the context of the trend, the Nasdaq 100 needs a push beyond this resistance and also beyond the next resistance at 9092.3 to establish a new higher high that would complement the higher lows to deliver uptrend continuation. The actualization of these price objectives would then bring 9167.4 into focus. A break above this level brings 9250.9 into the picture. This price level corresponds to the 161.8% Fibonacci extension of the wave XA in the harmonic pattern (crab). Several things could happen here. Retreat from this price level could be seen as the downside reversal of point D in the crab variant of the harmonic pattern, targeting previously breached resistance levels as they turn into new support targets. Advance above this level towards 9452.0 (February 5-7 highs) invalidates the crab and could allow for a further recovery towards pre-coronavirus levels.
On the flip side, we could also see price stalling at 9092.3, which may provide an opportunity to retest 8945.7 and 8691.0, which are the 141.4% and 127.2% Fibonacci extensions of wave XA in the harmonic pattern.
Failure to break the 8945.7 resistance allows the Nasdaq 100 to continue trading in a range which has this resistance as the upper boundary and the 8442.5 price level as the lower boundary, with 8691.0 intervening.