The major US stock indices are rebounding higher after yesterday’s sharp declines. A snapshot of the major indices 12 minutes into the opening is showing:
- Dow industrial average up 383 points or 1.19% at 32629.33
- S&P index up 55.92 points or 1.4% at 4047.15
- NASDAQ index up 205.8 points or 1.77% at 11829.05
- Russell 2000 up 21.77 points or 1.24% at 1783.85
The market is getting a boost from the reversal back lower in yields, short covering, and thoughts that lower stocks will slow growth and also slow central bank policy going forward.
Fed chatter today is still focused on getting to the neutral rate. The question is does the decline in asset values give policymakers cause for pause after reaching those levels? That could slow the declines in anticipation of a lower terminal rate (than expected yesterday or last week), but there is still a lot of uncertainty which is likely to lead to caution in equity markets.
Also helping today’s market is respected investor David Tepper told CNBCs Cramer that he was covering his NASDAQ shorts and that the selling may be over.
Technically, looking at the NASDAQ
NASDAQ
The Nasdaq Stock Market or NASDAQ is an American stock exchange. It trails only the New York Stock Exchange (NYSE) in market capitalization and is part of a network of stock markets and options exchanges.Launched back in 1971, NASDAQ is the acronym for the National Association of Securities Dealers Automated Quotations. Since then it is known simply as NASDAQ and has become one of the most influential exchanges worldwide.The NASDAQ was the world’s first electronic stock market, and has since assumed the majority of major trades that had been executed by the over-the-counter (OTC) system of trading.What Makes Up the NASDAQ?In particular, the exchange also features the NASDAQ Composite, which includes almost all stocks listed on the NASDAQ stock market. Along with the Dow Jones Industrial Average (DIJA) and S&P 500 Index, this is one of the three most-followed stock market indices in the United States.Overall, the NASDAQ stock market has three different market tiers. This includes the Capital Market, or an equity market for companies that have relatively small levels of market capitalization. The listing requirements for small cap companies are less stringent than for other Nasdaq markets that list larger companies with significantly higher market capitalization.Additionally, the Global Market is made up of stocks that represent the Nasdaq Global Market. The Global Market consists of 1,450 stocks that meet the exchange’s financial and liquidity requirements, and corporate governance standards.Finally, the Global Select Market is a market capitalization-weighted index made up of 1,200 US-based and international stocks that represent the Global Select Market Composite.
The Nasdaq Stock Market or NASDAQ is an American stock exchange. It trails only the New York Stock Exchange (NYSE) in market capitalization and is part of a network of stock markets and options exchanges.Launched back in 1971, NASDAQ is the acronym for the National Association of Securities Dealers Automated Quotations. Since then it is known simply as NASDAQ and has become one of the most influential exchanges worldwide.The NASDAQ was the world’s first electronic stock market, and has since assumed the majority of major trades that had been executed by the over-the-counter (OTC) system of trading.What Makes Up the NASDAQ?In particular, the exchange also features the NASDAQ Composite, which includes almost all stocks listed on the NASDAQ stock market. Along with the Dow Jones Industrial Average (DIJA) and S&P 500 Index, this is one of the three most-followed stock market indices in the United States.Overall, the NASDAQ stock market has three different market tiers. This includes the Capital Market, or an equity market for companies that have relatively small levels of market capitalization. The listing requirements for small cap companies are less stringent than for other Nasdaq markets that list larger companies with significantly higher market capitalization.Additionally, the Global Market is made up of stocks that represent the Nasdaq Global Market. The Global Market consists of 1,450 stocks that meet the exchange’s financial and liquidity requirements, and corporate governance standards.Finally, the Global Select Market is a market capitalization-weighted index made up of 1,200 US-based and international stocks that represent the Global Select Market Composite.
Read this Term daily chart below, the 50% midpoint of the move up from the March 2020 low comes in at 11449.29. Yesterday the low price reached 11574.94 within shouting distance of that key target level. Traders – like Tepper – may be looking toward that midpoint level as a low risk buying/profit taking level to lean against. The buying can also turn to sellers on a break below. However, there should be some cause for pause against that target on the test.
PS. A move to the 50% would imply a near 29.5% decline from the high. That is near a nice round 30% decline which is pretty significant. Looking back to the sharp move down in the early days of the pandemic, the price fell -32.04% before bouncing back higher and starting its run to the upside that culminated in the all-time high print at 16212.23.
www.forexlive.com