Diamonds at NASDAQ 100 highs
Nervousness ahead of the Fed and profit taking heading into year-end appear to be taking a toll on stock indices.
Share this:
Today is the day before the final FOMC meeting of 2021, and although it seems certain that committee members will vote to increase the pace of tapering bond purchases due to higher inflation, the question remains: “How much will they increase the pace of tapering?”. Additionally, what will members’ forecasts for inflation and growth look like, as well as the dot plot? Will the Omicron variant of the coronavirus play a role in the Feds guidance? Don’t forget as well that the trading year is coming to an end. Large funds who made money this year on stock index advances seem to be taking profits off the table due to the uncertainties surrounding the FOMC outcome and illiquid markets that usually come with year end.
What will inflation look like in 2022? See our inflation outlook!
The NASDAQ 100 is leading the pack on the selloff from the attempted recent bounce back towards all-time highs. The tech heavy stock index made all-time highs on November 22nd, before pulling back to the 50-Day Moving Average near 15800. Price then bounced and tried to take out the all-time highs, but sellers overtook buyers near 16413, hitting stops along the way as the tech heavy index sold off.
See our 2022 stock indices outlook
In doing so, the NASDAQ 100 is forming a beautiful “Diamond”, which is considered a reversal pattern. The target for the break of a diamond is the height of the pattern added to the breakdown point. In this case, it points towards the lows from early October and the 61.8% Fibonacci retracement from the lows of May 13th to the recent all-time highs, near 14414.25. This is also near horizontal support from the lows in early October. The first support level ahead of the diamond target is at the 38.2% Fibonacci retracement from the same timeframe at 15313, which also confluences with an upward sloping trendline. Below there is horizontal support at 14996, the 50% retracement level at 14863.75 and the 200-Day Moving Average crosses right at the target, near 14624.
Source: Tradingview, Stone X
Trade NASDAQ 100 now: Login or open a new account!
If the NASDAQ 100 bounces, resistance is at Monday’s highs of 16413, which is also trendline resistance and then the all-time highs at 16767.50.
Nervousness ahead of the Fed and profit taking heading into year-end appear to be taking a toll on stock indices. In the NASDAQ 100, it appears that all-time highs and diamonds may not last forever!
Learn more about index trading opportunities.
Today is the day before the final FOMC meeting of 2021, and although it seems certain that committee members will vote to increase the pace of tapering bond purchases due to higher inflation, the question remains: “How much will they increase the pace of tapering?”. Additionally, what will members’ forecasts for inflation and growth look like, as well as the dot plot? Will the Omicron variant of the coronavirus play a role in the Feds guidance? Don’t forget as well that the trading year is coming to an end. Large funds who made money this year on stock index advances seem to be taking profits off the table due to the uncertainties surrounding the FOMC outcome and illiquid markets that usually come with year end.
What will inflation look like in 2022? See our inflation outlook!
The NASDAQ 100 is leading the pack on the selloff from the attempted recent bounce back towards all-time highs. The tech heavy stock index made all-time highs on November 22nd, before pulling back to the 50-Day Moving Average near 15800. Price then bounced and tried to take out the all-time highs, but sellers overtook buyers near 16413, hitting stops along the way as the tech heavy index sold off.
See our 2022 stock indices outlook
In doing so, the NASDAQ 100 is forming a beautiful “Diamond”, which is considered a reversal pattern. The target for the break of a diamond is the height of the pattern added to the breakdown point. In this case, it points towards the lows from early October and the 61.8% Fibonacci retracement from the lows of May 13th to the recent all-time highs, near 14414.25. This is also near horizontal support from the lows in early October. The first support level ahead of the diamond target is at the 38.2% Fibonacci retracement from the same timeframe at 15313, which also confluences with an upward sloping trendline. Below there is horizontal support at 14996, the 50% retracement level at 14863.75 and the 200-Day Moving Average crosses right at the target, near 14624.
Source: Tradingview, Stone X
Trade NASDAQ 100: Login or Open a new account!
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
If the NASDAQ 100 bounces, resistance is at Monday’s highs of 16413, which is also trendline resistance and then the all-time highs at 16767.50.
Nervousness ahead of the Fed and profit taking heading into year-end appear to be taking a toll on stock indices. In the NASDAQ 100, it appears that all-time highs and diamonds may not last forever!
Learn more about index trading opportunities.
Related tags:
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Gold Q4 2026 outlook: Resilience in the face of rallying dollar and yields
As we headed towards the latter stages of Q3 and into Q4, the Fed had just hiked rates in a hawkish FOMC meeting, while the likes of the ECB and BoJ had also tightened their respective policies. Oil prices remained elevated amid the prolonged US-Iran conflict. Meanwhile, bond yields were breaking out, and the dollar was higher across the board. Yet, remarkably, gold was still holding in the positive territory for the third quarter, even if it had weakened somewhat in September.
Equity Indices Q4, 2026 Outlook: Cracks Begin to Show
There's still an open door for a melt-up in the S&P 500 and Nasdaq but the Dow and Russell 2000 are looking more vulnerable, and until calm hits the Treasuries market there's a higher probability for volatility. The big question is whether that's a next quarter theme or not.
Oil Quietly Hands the Fed a Reason to Stay Hawkish
Oil prices and the U.S. dollar are both on the front foot as elevated energy costs feed Fed warnings that inflation may prove sticky.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.