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CFD Update: NDX100 starting a new leg lower?

January 18, 2022
by Joseph Jeffriess, Market Analyst

Hi traders, today we’re looking at the NDX100 CFD index, which tracks the Nasdaq as its price crashed through a support point we have been watching since last week.

As mentioned, we spent most of today watching 15,500 which is a secondary support level below 15,600. This level was in play last week before the first breach occurred. The breach and today’s push lower have started to confirm the LH. Today all three major US indexes looked to be showing the same support patterns but as the European session progressed sharp selling kicked up after US treasury yields raced back to levels not seen since January 2020. The 10-year hitting 1.83%, remember this? This was a factor in a previous sell-off for stocks and could be returning. Last time this issue calmed down but for a week everyone was checking yield rates!

Another factor indexes are facing is earnings. Quarterly reports from 35 companies in the S&P 500 will be released in this weeks shortened trading week.

Back to the NDX100, we had hopes for the support range but this has started to look dashed at the moment after today’s break lower. Sellers have not only broken through support back have also started to test the longer-term uptrend. The next key move on the sell-side is to hold the move lower and beat the last HL. This changes the pattern of trend as we will have our first LH and LL. If we see a fightback tonight or if sellers fail to break the last HL there could still be small hope that we could sell some demand return.

A series of LHs and LLs indicates a normal downtrend and could be suggesting to us that a new medium-term downtrend has begun.

NDX100 D1 Chart

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