Chart of the Day - US100 (04.12.2024)

The Nasdaq 100 continues its remarkable ascent, achieving its 34th record close of the year amid mounting rate cut expectations, though signs of market exhaustion are emerging after an $11 trillion surge in US equities. The tech-heavy index demonstrates resilience even as positioning becomes increasingly crowded on the bullish side.

Key Market Statistics:

• Nasdaq 100 advances 0.3% to 19,480.91, marking its 34th record close of 2024

• December rate cut probability rises to 73.8%

• Three consecutive sessions of gains, up 2.21% over this period

• YTD performance: +29.77%

The tech sector's momentum persists despite warnings of extreme positioning from market strategists, including Citigroup's observation of "completely one-sided" futures positioning. This rally has been particularly notable for its breadth, with the index up 34.26% from its 2024 lows and showing a remarkable 37.71% gain from its December 2023 trough.

Notable sector movements included strength in Communication Services, while individual stocks showed mixed performance. Palantir Technologies led gains (+6.9%) on expanded government authorization, while Intel faced pressure (-6.1%) amid CEO succession speculation.

The labor market continues to show resilience, with job openings rising to 7.74 million in October, exceeding expectations and supporting the narrative of a "soft landing." This data, combined with Fed Governor Kugler's comments about solid labor markets and improving inflation trends, has bolstered market confidence in imminent rate cuts.

The technical picture remains strong despite some analysts, including Bloomberg Intelligence, noting early signs of strain as 2025 approaches. The index's three-day winning streak, accumulating gains of 2.21%, suggests persistent institutional buying interest despite elevated valuations.

Market Implied Rate Cuts. Source: Bloomberg

Looking ahead, market attention focuses on upcoming jobs data and Fed Chair Powell's commentary, which could provide crucial insights into the timing of potential rate cuts. The current positioning suggests markets are increasingly confident in a December or January policy pivot, though such unanimous sentiment often precedes periods of increased volatility.

US100 (D1 interval)

The Nasdaq-100 index, represented by the US100 contract, is trading at an all-time high, with the mid-July peak of 20,895 now acting as initial support for bulls. Key target levels for bears include the 50-day SMA at 20,606 and the August highs near 19,917, which align with the 100-day SMA. The RSI is gradually trending higher, nearing overbought territory, signaling strong momentum. Meanwhile, the MACD is expanding following a recent bullish crossover, further confirming the current upward trend. These technical indicators suggest continued bullish strength, though caution is warranted as the RSI approaches heightened levels. Source: xStation