Although it was already clear before the Fed's interest rate decision on Wednesday last week that a rate cut would take place, it was still unclear whether it would be 50 basis points or just 25 basis points. According to the CME FedWatch tool, the probability of a rate cut of 50 basis points had increased slightly in the days leading up to the Fed meeting.<\/p>\n\n\n\n
Even though lower interest rates tend to be bullish for the equity markets, the reaction of the equity markets was uncertain. An interest rate hike of 50 basis points could also be interpreted as a sign of an increasing risk of recession, which in turn would be a negative signal for the stock markets. For this reason, Fed Chairman Jerome Powell's speech at the subsequent press conference was a particular focus of attention. Powell emphasized that the decision to cut interest rates was in line with the progress made in the fight against inflation and should also keep the labour market stable. As inflation is close to the target of 2 %, the scope for further interest rate cuts in the coming months remains open.<\/p>\n\n\n\n
The soft landing scenario is still the basic scenario for most analysts. However, if, contrary to expectations, signs of an increased risk of recession emerge in the coming months, this is likely to have a significant negative impact on the stock market. As long as this is not the case, the chances of the bull market continuing are very good from a fundamental perspective.<\/p>\n\n\n\n
<\/a>Bullish breakout from triangle<\/h2>\n\n\n\nThe Nasdaq 100 Index broke out of the triangle formation to the upside on Thursday. A triangle is a bullish consolidation formation in an uptrend. A breakout from the triangle signals further bullish potential in the coming weeks.<\/p>\n\n\n\n![\"Nasdaq](\"https:\/\/www.captrader.com\/wp-content\/uploads\/2024\/09\/word-image-56019-1.png\")
<\/figure>\n\n\n\nNasdaq 100 Index daily chart<\/p>\n\n\n\n
<\/a>Resistance at 20,000 points<\/h2>\n\n\n\nAfter breaking out of the triangle, the Nasdaq 100 rose to the horizontal resistance in the area of the round and psychologically important 20,000 point mark. A short-term setback in the next few days and a retest of the downtrend line of the triangle would open up a new opportunity for an entry out of the correction. In addition, the daily EMAs 20 (purple) and 50 (green) are likely to rise further over the next few days and provide additional support in the 19,500 points area. Should the breakout above the 20,000 points take place directly and without a prior correction, waiting for a short-term correction and a retest of the 20,000 points would be another alternative for a bullish trade.<\/p>\n\n\n\n
<\/a>Outlook remains bullish<\/h2>\n\n\n\nBoth the technical and fundamental outlook remain bullish at the moment. The seasonally weak September is not quite over yet. However, in the current market environment, short-term setbacks can primarily be seen as an opportunity to go long. It should also not be forgotten that the upcoming US elections in November are likely to become more of a focus for Wall Street in the coming weeks and could leave their mark. Historically, the stock markets are often susceptible to setbacks in the weeks before the election, but in the weeks after the election, the chances of prices rising again are all the better. The decisive factor here is not even necessarily who wins the election, but rather the fact that the uncertainty disappears from the market after the election and investors know what they are up against.<\/p>\n\n\n\n
<\/figure>\n\n\n\nNasdaq 100 Index daily chart<\/p>\n\n\n\n
<\/a>Resistance at 20,000 points<\/h2>\n\n\n\nAfter breaking out of the triangle, the Nasdaq 100 rose to the horizontal resistance in the area of the round and psychologically important 20,000 point mark. A short-term setback in the next few days and a retest of the downtrend line of the triangle would open up a new opportunity for an entry out of the correction. In addition, the daily EMAs 20 (purple) and 50 (green) are likely to rise further over the next few days and provide additional support in the 19,500 points area. Should the breakout above the 20,000 points take place directly and without a prior correction, waiting for a short-term correction and a retest of the 20,000 points would be another alternative for a bullish trade.<\/p>\n\n\n\n
<\/a>Outlook remains bullish<\/h2>\n\n\n\nBoth the technical and fundamental outlook remain bullish at the moment. The seasonally weak September is not quite over yet. However, in the current market environment, short-term setbacks can primarily be seen as an opportunity to go long. It should also not be forgotten that the upcoming US elections in November are likely to become more of a focus for Wall Street in the coming weeks and could leave their mark. Historically, the stock markets are often susceptible to setbacks in the weeks before the election, but in the weeks after the election, the chances of prices rising again are all the better. The decisive factor here is not even necessarily who wins the election, but rather the fact that the uncertainty disappears from the market after the election and investors know what they are up against.<\/p>\n\n\n\n
Both the technical and fundamental outlook remain bullish at the moment. The seasonally weak September is not quite over yet. However, in the current market environment, short-term setbacks can primarily be seen as an opportunity to go long. It should also not be forgotten that the upcoming US elections in November are likely to become more of a focus for Wall Street in the coming weeks and could leave their mark. Historically, the stock markets are often susceptible to setbacks in the weeks before the election, but in the weeks after the election, the chances of prices rising again are all the better. The decisive factor here is not even necessarily who wins the election, but rather the fact that the uncertainty disappears from the market after the election and investors know what they are up against.<\/p>\n\n\n\n