Trading: Between the Nasdaq Shock and Awaiting Inflation

Today is a pivotal day! We're awaiting two major catalysts that could shake up the markets: US inflation and Oracle's earnings. In fact, the volatility already started yesterday with a memorable drop on the Nasdaq that I experienced live. In this article, I'll break down the stakes, share my technical analysis, and look back on this intense trading experience.

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My Crazy Day on the Nasdaq: A Lesson in Resilience

I trade every day, which is actually quite rare on YouTube. And yesterday was particularly eventful. I was positioned on the Nasdaq with large lots, at $60 per point. Then, in the span of 5 seconds, a 200-point drop. A real "nosedive," as they say. Obviously, I was on the wrong side of the trade. It was impossible to predict... It might have been a margin call from a hedge fund that triggered this sell-off.

In a matter of seconds, I found myself with a temporary loss of $12,000. I analyzed it this morning with my students from the GOOD MORNING TRADING Premium. The good news is that I managed to recover everything afterward and even finished the day in the green, commissions paid. It felt like an eternity, but looking back, it must have lasted about an hour and a half. This kind of event doesn't happen often, fortunately! But human nature means our brain primarily remembers the bad things to help us gain experience.

The Two Catalysts of the Day

Today, two major events will set the pace for the session. They are extremely important for what comes next.

US Inflation at 2:30 PM

This is the moment of truth. The United States is releasing its inflation figure for the month of May. The expectation is 4.2%, which would be the first time it crosses the 4% mark in almost four years. It's the major event everyone has been waiting for all week.

Oracle's Earnings Tonight

After the close, around 10:15 PM, Oracle will release its earnings. This is crucial as it's a tech heavyweight and a true barometer for artificial intelligence. We saw Broadcom disappoint the markets and take a monumental hit. If Oracle also disappoints, it could trigger a correction in tech stocks. Conversely, a success would validate the current rebound attempt.

Technical Analysis of the Indices: Where Do We Stand?

While waiting for these announcements, the markets are in a holding pattern. They have all stabilized on important support levels.

• Nasdaq: After yesterday's sharp fall, it bounced off its weekly support 1 (S1 weekly) and is now stabilizing on its monthly middle S1. This is good news, a good sign of reaction at a key level.
• S&P 500: It also rebounded well, off the 7250-point level, one of my favorite levels for attempting a bounce (the 250 and 750 levels).
• Dow Jones: It is in a stabilization phase, in a range on its weekly middle S1.
• CAC 40 and DAX: The European indices are also waiting. The CAC 40 is more towards the top of its range, a decent sign. The DAX, on the other hand, is at the bottom, but it's coming off a strong rally over the last two months.

Basically, everyone is waiting for 2:30 PM. Don't get clever before then; it's taking completely unnecessary risks.

Did You Know? Fighting Inflation with a Pin

To lighten the mood, a little historical anecdote. In 1974, facing rampant inflation, US President Gerald Ford launched an improbable campaign: "Whip Inflation Now," whose acronym formed the word "WIN."

The idea? For Americans to proudly wear a "WIN" pin to show their commitment to beating inflation through civic duty: by consuming less and gardening more. Needless to say, it didn't work... Inflation continued to climb. Alan Greenspan, the former Fed chairman, even called it one of the most "absurd" ideas to ever come out of Washington. It just goes to show, history offers great lessons in relativity! 😉

Conclusion

This day is shaping up to be full of volatility. Caution is advised before the release of US inflation data at 2:30 PM. Oracle's earnings tonight will also be decisive for the trend in tech stocks. The drop in oil prices is good news, but the market remains hanging on these two major events. Stay curious, analyze, and above all, manage your risk.

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