The Nasdaq managed to
extend the rally into a new all-time high recently. The conditions for further
upside in the index remain in place.

In fact, Trump’s policies
will be a positive driver for growth in 2025 and with the Fed remaining in an
easing cycle, growth should remain positive and might even accelerate as
signalled already by the Atlanta Fed GDPNow indicator.

The only bearish reason we
had for the stock market was the rise in Treasury yields in the past couple of
months. That’s generally bearish only when the Fed is tightening policy though
not when yields rise on positive growth expectations.

Right now, the Fed’s
reaction function is that a strong economy would warrant an earlier pause in
the easing cycle and not a tightening. That should still be supportive for the
stock market.

If the Fed’s reaction
function were to change to a potential tightening, then that will likely
trigger a big correction in the stock market on expected economic slowdown. For
now, the pullbacks look as something healthy and opportunities to buy the dips.

Nasdaq
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the Nasdaq extended the rally into a new all-time high recently and
it’s now pulling back from the highs. The buyers will likely step in around the
previous all-time high at 21338 to position for further upside. The sellers, on
the other hand, will want to see the price breaking lower to increase the
bearish bets into the trendline around the 21100 level.

Nasdaq Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the recent breakout and the current pullback. There’s not much
we can glean from this timeframe, so we need to zoom in to see some more details.

Nasdaq Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price broke below the upward trendline that was defining the
bullish momentum. This is generally a sign of a loss in momentum which leads to
a consolidation or a pullback. We can see that we have an interesting zone
around the 21500 level where the price reacted from several times in the past
few days.

The sellers will likely step
in here to position for a drop into the 21338 level next. The buyers, on the other
hand, will look for a break higher to increase the bullish bets into new highs.
The red lines define the average daily range for today.

Upcoming Catalysts

Today we conclude the week with the US NFP report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

The S&P 500 managed to
extend the rally into a new all-time high recently. The conditions for further
upside in the index remain in place.

In fact, Trump’s policies will
be a positive driver for growth in 2025 and with the Fed remaining in an easing
cycle, growth should remain positive and might even accelerate as signalled
already by the Atlanta Fed GDPNow indicator.

The only bearish reason we
had for the stock market was the rise in Treasury yields in the past couple of
months. That’s generally bearish only when the Fed is tightening policy though
not when yields rise on positive growth expectations.

Right now, the Fed’s
reaction function is that a strong economy would warrant an earlier pause in
the easing cycle and not a tightening. That should still be supportive for the
stock market.

If the Fed’s reaction
function were to change to a potential tightening, then that will likely
trigger a big correction in the stock market on expected economic slowdown. For
now, the pullbacks look as something healthy and opportunities to buy the dips.

S&P 500
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the S&P 500 extended the rally into a new all-time high recently
and it’s now pulling back from the highs. The buyers will likely step in around
the previous all-time high at 6053 to position for further upside. The sellers,
on the other hand, will want to see the price breaking lower to increase the bearish
bets into the trendline
around the 5900 level.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor upward trendline defining the current bullish momentum.
The buyers will likely keep on leaning on it to position for new highs, while
the sellers will look for a break lower to increase the bearish bets into the 6053
level.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have an interesting zone around the 6090 level where the price
reacted from several times in the past few days. The sellers will likely step
in there to position for the break below the trendline, while the buyers will
look for a break higher to increase the bullish bets into a new all-time high. The
red lines define the average daily range for today.

Upcoming
Catalysts

Today we conclude the week with the US NFP report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Monetary policy is very restrictive, weighing on supply capacity and investment
• No reason to disagree with market view that neutral rate is around 2.50% to 3.50%
• Tariffs could lead to a return of supply chain disruption as seen in recent years
• Broadly right to say UK has limited direct exposure to US tariffs

Do keep in mind that Dhingra is arguably the most dovish member on the committee. So, it’s important to read her remarks in that context. She was the only one who dissented back in September, voting for a rate cut. And following the 25 bps move last month, she seems to be in the camp to want another one later this month. As things stand, markets are not of the same view with a ~94% probability of no change priced in.

This article was written by Justin Low at www.forexlive.com.

The Russell 2000 has been underperforming
the other major indices recently and failed to extend into new highs. The
conditions for a strong rally into new all-time highs remain in place though.

In fact, Trump’s policies will
be a positive driver for growth in 2025 and with the Fed remaining in an easing
cycle, growth should remain positive and might even accelerate as signalled
already by the Atlanta Fed GDPNow
indicator.

The only bearish reason we
had for the stock market was the rise in Treasury yields in the past couple of
months. That’s generally bearish only when the Fed is tightening policy though
not when yields rise on positive growth expectations.

Right now, the Fed’s
reaction function is that a strong economy would warrant an earlier pause in
the easing cycle and not a tightening. That should still be supportive for the
stock market.

If the Fed’s reaction
function were to change to a potential tightening, then that will likely
trigger a big correction in the stock market on expected economic slowdown. For
now, the pullbacks look as something healthy and opportunities to buy the dips.

Russell 2000
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the Russell 2000 failed to break into a new all-time high and pulled
back. The buyers will need to see the price breaking higher to increase the
bullish bets into new highs. The sellers, on the other hand, will keep on stepping
in around the recent highs to position for a drop back into the 2290 support.

Russell 2000 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor downward trendline
defining the current pullback. This might turn into a bull
flag if the price were to break above the trendline. That’s when we can
expect the bullish momentum to pick up as the buyers will likely pile in more
aggressively. The sellers, on the other hand, will likely lean on the trendline
to position for the drop into the 2290 support.

Russell 2000 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a strong support
turned resistance around the 2420 level. If the price gets there’s the sellers
will likely step in with a defined risk above the resistance to position for
the drop into the 2920 support. The buyers, on the other hand, will look for a
break higher to start targeting new highs. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we conclude the week with the US NFP report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Prior +0.2%

Looking at the breakdown, there were GDP contributions from household consumption (+0.4%), government expenditure (+0.1%), gross fixed capital formation (+0.4%), and changes in inventories (+0.4%). That is partially offset by a decline in growth for trade i.e. exports less imports (-0.9%) on the quarter.

This article was written by Justin Low at www.forexlive.com.