NAS100 Analysis

The US index comes from its best month of the year and the impressive recovery from June’s multi-month lows. It has also posted three consecutive profitable weeks, but declined on Friday after the blowout jobs report from the US.

The creation of 528,000 new jobs in July, the return of Unemployment to pre-pandemic levels (3.5%) and the elevated wages, which put upward pressure on inflation, worked against the stock market, by boosting expectations around the Fed’s tightening path.

These had eased after the central bank’s recent hint of a potentially slower pace of rate hikes ahead, but Friday’s impressive employment figures made markets more aggressive. CME’s FedWatch Tool is pricing in another large 0.75% rise in September, with nearly 70% chances at the time of writing.

On the other hand, they also vindicate the Fed’s narrative against recession, but it looks like such fears have not gone away, as the economy contracted again during the second quarter.

There is still a long time until the next policy meeting and officials will have the opportunity to go over some critical data points. The first of those is expected on Wednesday, in the form of the latest CPI inflation release, which can determine the trajectory of NAS100 and spark volatility.

The tech-heavy index retreats for third straight day and the Relative Strength Index (RSI) breaches the 50 mark – factors that can send it towards 12,800. Further weakness below 12,654-12,480 though, will need strong catalyst, as it contains strong technical levels.

Despite the recent weakness, NAS100 has covered around half of its third quarter plunge (from high to low) and near-term bias is on the upside, as long as it trades above the EMA200 (black line). As such, it has the ability to set new highs and surpass 13,560-13,654. It will probably need fresh impetus for such move, that will bring 14,302 in the spotlight.