The long-term retracement zone at 21881.82 to 22532.88 is a huge barrier right now. Unless the war between the U.S. and Iran ended abruptly, we’re not expecting the buying to be strong enough to overtake the whole zone, but we could start to see a steady climb if new buyers can establish support on the strong side of 21881.82.
The first sign of strength late in the session will be a sustained move over 21881.82. Taking out the minor swing top at 22052.41 will confirm a shift in momentum. This could trigger an acceleration to the upside.
So while the set up is there for an upside breakout, the IXIC is also expected to face some serious headwinds at the 200-day moving average at 22363.58, a 50% level at 22532.88 and the 50-day moving average at 22556.88. Until buyers can clear this resistance cluster, we’re likely to see renewed sideways to lower pressure.
On the downside, today’s key support is the minor retracement zone at 21371.33 to 21210.60.
Iran Deadline Pushes Investors Away from Risk
The Iran deadline is the main event today. Either Trump gets what he wants on the Strait of Hormuz or the situation gets worse. There’s no middle ground and traders know it. When the outcome is that binary, you don’t sit in risk assets and wait.
Oil jumped on those fears and that creates a second problem for the Nasdaq. Higher oil feeds inflation and inflation keeps rates elevated. The Nasdaq doesn’t do well in that environment. On top of that, if oil stays here long enough to trigger demand destruction, you’ve got a growth problem on top of a rate problem.