Nasdaq – Tech buoyed by Amazon earnings but stocks elsewhere struggle

• Amazon results boost tech stocks
• US data probably doesn’t change things ahead of the Fed
• NAS100 bounces back but major support broken this week

It’s been another tough week for European stock markets which are set to end it in the red once more amid concerns over the economy.

Investors have been worried about the eurozone economy for some time and it would appear the ECB shares those concerns. While that may spare the bloc the added pressure of higher rates over the medium term, for now, the threat of recession is real and that’s weighing on the region’s stock markets

We didn’t get much of a bump from earnings season this week which has been quite mixed and not particularly well received. Obviously, tech is once more the outlier, with the Nasdaq posting near 1% gains while most other indices sit in the red, buoyed by Amazon’s results.

US economic data hasn’t really moved the dial one way or another, coming in largely in line with expectations. With markets pricing in such a small chance of a rate hike next week from the Fed, perhaps that’s a good thing as it doesn’t further stimulate the debate over the need for further tightening at the moment.

Rebound comes after major technical break

Despite today’s rebound, the NAS100 is looking very vulnerable after breaking below such a key level of support this week.

NAS100 Daily

Source – OANDA on Trading View

The move below 14,500 – and a significant move unlike what we’ve seen occasionally in recent months – took the index to a five-month low and based on the size of the descending triangle pattern, further pain could be on the cards.

The next big test could fall around 14,000 around the top of the 200/233-day simple moving average band and a big psychological barrier.

If it continues to build on today’s gains, 14,500 stands out as the first major test with it having been such a key area of support and the base of that descending triangle formation.

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