Review and dynamics
Yesterday's publication of the US macro-economic statistics has increased volatility in the financial markets. The data was weaker than forecast.
The likelihood of the rate hike in the US in September has decreased. According to the interest rate futures of the Fed funds, probability of a rate hike at the meeting in September was 12% on Thursday versus 15% on Wednesday. The USD fell in the currency market, while the US stock indices rose.
Yesterday, the index NQ100 has regained almost all losses incurred from the beginning of the month, rebounding from the support level of 4717.0 (ЕМА50 on the daily chart) to the level of 4825.0. On the 4-hour and weekly the upper limits of the descending channels are near the level 4825.0.
However, the NQ100 index remains in the ascending channel on the daily chart with the upper limit near the level of 4950.0. Earlier in August, the index reached historic highs at the level of 4835.0, which is almost by 100 points or 2% above the highs of 2015.
The indicators OsMA and Stochastic give mixed signals. On the daily chart the indicators suggest to open long positions, while on 4-hour they give signals for short positions, showing probability of the downward correction after yesterday's growth. In the case of the downward movement, the nearest targets will be at support levels of 4765.0 (ЕМА144 on 4-hour chart), 4750.0 (ЕМА200 on 4-hour chart) and 4717.0 (ЕМА50 on the daily chart).
Breakout of the support level of 4676.0 (Fibonacci 23.6% after the rise from the lows caused Brexit at the level of 4180.0 and the lower limit of the ascending channel on the daily chart) may trigger correction against the rise in the index since the beginning of February 2016 and the rise after Brexit.
In case of the decline, the nearest targets will be at support levels of 4582.0 (Fibonacci 38.2% and ЕМА144 on the daily chart), 4535.0 (ЕМА200 on the daily chart) and4505.0 (Fibonacci 50.0%).
However, in case of the rise in the interest rates, the impact on the USD and on the US stock market may be low, as expected that the Fed will implement monetary policy tightening slowly.
The US stock market will have a chance to maintain uptrend.
On the monthly chart the indicators OsMA and Stochastic give signals to buy
Support levels: 4765.0, 4750.0, 4717.0, 4676.0, 4582.0, 4535.0 and 4505.0.
Resistance levels: 4820.0, 4835.0, 4900.0 and 5000.0.
Sell on the market. Stop Loss: 4820.0 Targets: 4765.0, 4750.0, 4717.0 and 4676.0.
Buy Stop: 4836.0. Stop Loss: 4795.0. Targets: 4900.0 and 5000.0.
Rebound from the level of 4825.0
Beginning of the downward correction