Nasdaq Composite: A less unconditional market psychology

(BFM Bourse) – The Nasdaq Composite index is entering a forced price breathing phase, with the rise of an additional notch of geopolitical tensions in the Middle East, since the death by air strike of a high dignitary of the regime Iranian, strikes command by the White House.

In response to Iranian threats to avenge the death of General Soleimani, the President of the United States said that Washington had selected 52 sites in Iran that could be hit "very quickly and very hard" if the Islamic Republic attacks personnel or American sites. "Donald Trump undoubtedly wants to avoid a war, but who knows in what mechanism the United States put the finger by deciding to assassinate the Iranian general most popular, and who was also close to Ayatollah", s' questions Tangi Le Liboux, analyst for Aurel BGC.

While Tehran has announced that it will free itself from all limits on uranium enrichment, France, Germany and Great Britain on Sunday called on Iran to abandon measures that are contrary to the 2005 nuclear agreement .

What naturally weigh on the risk appetite on Wall Street. Especially since the activity barometer in services in China (PMI services Caixin), published last night, did not help: it came out in December down one point, to 52.5.

On the American side, the main statistic on Friday was the manufacturing PMI within the meaning of the ISM (Institute for Supply Management), down significantly in December to 47.2, against a target (consensus) at 49.0. As a reminder, the threshold of 50 separates by construction a contraction from an expansion of the sector considered.

To follow the non-manufacturing PMI index at 3:45 p.m.

KEY GRAPHICS

We specified Friday, before the opening of the debates on the actions, that the bullish gap formed Thursday, brought to be covered by the prices, by the top in the immediate future, or by the bottom a little later, was not qualifying in our eyes as a prosecution gap, in the formal sense. This recovery happened precisely.

This phase is not that trivial: it shows that the market is no longer willing to continue its rise unconditionally. Expectations of additional guarantees will now impose digestion phases.

Let there be no mistake: the background market psychology remains buoyant, but less aggressive and more attentive than over the last three months of the year, and in particular the exceptional month of December, in which concentrated no less than four gaps of pursuit.

Neutral advice at the scale of the upcoming session, after Friday's drop session.

FORECAST

In view of the key graphic factors that we have identified, our opinion is neutral on the short-term Nasdaq Composite index.

We will take care to note that a crossing of 10,000.00 points would rekindle the tension at purchase. While a break of 8705.00 points would relaunch the selling pressure.

DAILY DATA GRAPH

nasdaq composite a 20200106144458 - Nasdaq Composite: A less unconditional market psychology

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