Nasdaq Dives on Recession Fears

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Nasdaq futures yesterday fell to 1.6% in early U.S. trading. They closed lower on the weak ISM manufacturing report, increasing fears of a possible recession. Investors concerned about the country's economic health and possible moves by the Federal Reserve sent the Nasdaq Composite down -4.20% yesterday and -5.91% posting morning premarket.

Apple's results beat expectations resulting in a +0.6% revaluation at the close, despite challenges in the Chinese market, increased services revenue has mitigated the impact.
Amazon on the other hand reflected a -7% decline at the close, with a more cautious consumer market in their spending. This strong representation of technology companies means that the index faces significant pressure from economic fears and recent disappointments on corporate results. Currently the mutual and banking funds as a whole are in the midst of starting to rotate portfolios and this is also having some impact.

Looking at the chart, Nasdaq has its checkpoint (POC) at 19,687.86 points and currently we are starting to see the market show an oversold Nasdaq at 37.14% RSI. It will not be unusual for the first support zone of 18,400 points to act as an impulse zone to revalue its price. If the Non-Farm Payrolls released this afternoon show better than expected results similar to May's 2.19 million versus June's 2.06 million, it is possible that the market will facilitate this upward momentum with the return of confidence.

Ion Jauregui - ActivTrades Analyst





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