Last week the Nasdaq finished the month of April down 13.56% after closing 3% or more lower for four consecutive weeks in a row. The Nasdaq closed on Friday 141 points below the March 15th low at 12802.5 dropping 602 points on the final trading day of April.  This marked one of the worst monthly losses for the Nasdaq on record. Price made 3 consecutive 600+ point moves dropping sharply on Tuesday and then bouncing sharply on Wednesday and Thursday only to be sold off again on Friday closing almost at the absolute low for the week.  Notably price was rejected hard at the 9 ema several times suggesting that market participants were very aggressive in selling into resistance.  Price now sits below the Mar 15th pivot low and below the longer term 236 Fib retracement measured from the 2020 Covid low.
Going into this week my bias is bearish. From a technical perspective the setup is a challenging one to read.  Price has formed the dreaded H pattern. Although lower prices are expected given the weak Friday close below the Mar 15th pivot price can reverse hard from this setup. The key zone to watch is around the green support zone above 1.13 fib extension.  If a breakdown fails, it often happens in this area. If price pushes down through the 1.13 fib extension, I will expect a move lower to the 1.27 Fib extension and the 12207 Mar 5th pivot low. A full compound corrective move to the 1.618 fib extension is possible which would take price down to 11685. If price manages to reverse and move higher expect resistance at the 9 ema and then the tan Neutral box above.
Next week we start a new month, and the news cycle will focus heavily on inflation data and the FOMC statement/rate decision on Wednesday. Much of the selling last week can be attributed to fears related to what the Fed meeting will reveal. A 50-basis point rate hike is expected but the market fears a continued hawkish tone.  Any softening of the hawkish tone could lead to a massive rally.  Following the FOMC the week wraps up with Non- Farm payroll data which can also be market moving.  This will happen with the backdrop of earnings season.  Suffice to say it will be another interesting week.  It is impossible to predict how the market will react to these events so the best tactic is to keep trading time frames short and positions small as a harsh reversal may a happened at any time.  It very much continues to be a trader’s market.