One for late night traders Nasdaq Composite: New year gap...

One for late night traders

Nasdaq Composite: New year gap beckons

Jan 11, 202401:09 GMT+11

IXIC+0.09%NQ1!0GOLD0CL1!+0.90%
KEY POINTS:

• U.S. equity index futures edge red
• Mortgage Market index 190.6 vs 173.5 last week
• Euro STOXX 600 index off ~0.04%
• Dollar flat; gold edges up; crude up >1%; bitcoin dips
• U.S. 10-Year Treasury yield edges down to ~3.99%

NASDAQ COMPOSITE: NEW YEAR GAP BECKONS
In the wake of a more than 43% surge last year, the Nasdaq Composite IXIC stumbled into 2024.
Indeed, the tech-laden index kicked off the new year with an opening downside gap. It then fell more than 3% over the first three trading days of the new year.
However, with a sudden snap back, it is now down just 1% in early January, and attempting to quickly fill its January 2 gap:

Thomson ReutersIXIC01102024
The IXIC ended Tuesday at 14,857.709, which put it back within the 76.4%-78.6% Fibonacci retracement zone of its 2021-2022 decline, in the 14,767-14,902 area, for the second-straight session.
Meanwhile, the January 2 gap requires a push to 14,955.369 for a fill.
Bulls will want to see this gap filled, otherwise if the Composite were to quickly roll over again, it could signal that the year's opening salvo was a breakaway gap to the downside.
Since breakaway gaps tend to occur in the early stages of a move, it could imply potential for a much more severe and protracted decline.
If the Composite fills the gap, and ends back above the upper bounds of the Fibonacci retracement zone at 14,902, it can suggest it is back on track to challenge its December 28 high at 15,150.067 and above.
If the gap goes unfilled, and the IXIC ends back below the lower bounds of the Fibonacci retracement zone at 14,767, the focus may turn back to the downside.
In terms of the next levels on the downside, the January 5 low was at 14,477, and the rising 50-day moving average ended Tuesday at about 14,250.
The December 4 trough was at 14,058.
Thus, with markets laser-focused on Thursday morning's CPI release, traders will be closely eyeing the Nasdaq's trading action.