The NASDAQ index experienced a decline yesterday, dropping over 400 points at session lows. This movement brought the index below its 200-hour moving average, a position not seen since August 1. During the earlier instance in August, the NASDAQ briefly dipped below this average but bounced back, later achieving an all-time high of 21803.75 on August 13. <\/p>\n
Yesterday’s pullback tested the 200-hour moving average at 21140.04 but closed at 21172.86. Currently, futures suggest an opening drop of 87.32 points, which may see it fall back below the 200-hour moving average, potentially favouring sellers. The immediate downside target stands at 20864.09, the 38.2% retracement from the June 23 low. <\/p>\n
Later today, S&P Global Manufacturing PMI is expected to be 49.5, slightly down from last month’s 49.8. The services PMI estimate is projected at 54.2, a drop from 55.7. At 10 AM ET, US existing home sales for July are forecasted at 3.92 million, compared to 3.93 million previously. Meanwhile, the US leading index for July is anticipated to decrease by 0.1%, contrasting with the prior 0.3% decline.<\/p>\n
We are seeing US stocks poised for a weak open, with the NASDAQ in focus as it targets a start below its 200-hour moving average. This level has served as a key floor for buying activity, and a sustained break could signal a shift in short-term market control. Yesterday\u2019s session already saw a steep decline of over 400 points, testing this critical support.<\/p>\n
This technical breakdown is happening as July’s CPI report showed core inflation holding firm at 2.8%, complicating the outlook for rate cuts. With Fed officials signaling they will hold interest rates at 5.0% through the end of the year, growth-oriented tech stocks are facing significant headwinds. The market is adjusting to the reality that borrowing costs will remain elevated for longer than previously hoped.<\/p>\n
Looking back, we saw a similar dip below this moving average on August 1, but buyers stepped in aggressively, driving the index to a new all-time high of 21803.75 just last week on August 13. However, yesterday’s break attempt was more forceful, and today\u2019s pre-market futures suggest sellers are not finished yet. This pattern feels similar to the choppy conditions we experienced in late 2023 when rate uncertainty dominated sentiment.<\/p>\n
For derivative traders, this setup suggests it is time to consider defensive positioning. The VIX, which sat near 13 for most of July, has ticked up to 17.5 this week, making option premiums more attractive for sellers but also signaling rising fear. Buying near-term put options on the QQQ, perhaps with September expirations, could offer protection against a deeper slide toward the next major support level.<\/p>\n
That next key downside target for the NASDAQ sits at the 38.2% retracement level of 20864.09. Yesterday’s low came very close to this mark, indicating it is clearly on the radar for institutional sellers. A definitive break of the 200-hour moving average today would make a test of this 20864 level highly probable in the coming sessions.<\/p>\n
However, given the sharp reversal after the August 1 dip, we must be prepared for another head fake. If the market finds its footing and reclaims the 200-hour average, it could create a bear trap and frustrate short-sellers. In that scenario, strategies that benefit from volatility without a clear direction, like straddles or strangles, might prove more effective.<\/p>\n
All eyes will now be on the S&P Global PMI estimates and existing home sales data due out later this morning. Any signs of a sharper-than-expected economic slowdown could validate the bearish sentiment and accelerate the move lower. Conversely, stronger data might be enough to encourage buyers to defend these key technical levels once again.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" NASDAQ drops below 200-hour average; futures signal further dip amid economic data, possibly favoring sellers ahead.<\/p>\n","protected":false},"author":62,"featured_media":16987,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-29446","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/29446","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=29446"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/29446\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16987"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=29446"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=29446"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=29446"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}