The Nasdaq experienced a significant rally after comments from Fed Chair Powell hinted at a more supportive approach. There’s about an 84% chance of a rate cut in September, with a possibility of easing by 54 basis points by the end of the year. The upcoming US Non-Farm Payrolls report is expected to greatly affect interest rate expectations. On the daily chart, the Nasdaq bounced back above an important trendline following Powell’s remarks. The 4-hour chart shows a price range with 23,375 as support and 23,650 as resistance, where buyers and sellers are actively trading. The 1-hour chart reveals a minor upward trendline that buyers may use to push prices higher.

Key Developments In The Market

Important events include Nvidia’s earnings release and the US Jobless Claims data, with the US PCE price index coming out later this week. These factors are likely to influence market trends soon. The recent statements from the Federal Reserve have changed the market outlook and created a favorable atmosphere for the Nasdaq. Currently, the market anticipates an 84% chance of a rate cut next month, based on the latest data from the CME FedWatch tool. This easing sentiment will likely shape our short-term trading strategies. All attention is now on the upcoming Non-Farm Payrolls report, which could be a key turning point. After July’s unexpected report, which revealed 215,000 jobs added, economists predict a lower figure of 160,000 for August. Any significant deviation from this forecast could lead to a sharp market movement, making long volatility strategies such as straddles on the QQQ ETF worth considering.

Technical Analysis Considerations

From a technical perspective, we are closely monitoring the 23,375 level as a crucial support point for the Nasdaq 100 index. Selling out-of-the-money put options with strike prices near or below this level may be a good way to earn premium while the easing sentiment lasts. If the market continues to rise toward the 23,650 resistance, we should brace ourselves for some profit-taking. The Nasdaq’s volatility index, the VXN, has dropped to 14.5, which is low compared to earlier in 2025. This makes buying protective puts or even speculative call options relatively inexpensive. Given how quickly sentiment shifted in spring 2024, it’s wise to maintain downside protection even in the current bullish environment. The Nvidia earnings report later today poses a significant risk for the tech sector. Implied volatility for Nvidia options expiring this week has risen above 90%, indicating a strong expectation of price movement. Traders should note that a major surprise—positive or negative—could not only impact Nvidia but also cause the Nasdaq 100 index to open with a significant gap tomorrow. Create your live VT Markets account and start trading now.

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