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Sentiment towards indices and the specifically stays closely tilted in favor of the bears…
After a decade of costs going basically straight up, NASDAQ 100 (US Tech 100) merchants are actually adjusting to the precise reverse situation.
Since peaking close to 15,250 in late March, the NASDAQ 100 has traded basically straight decrease for the final two months, dropping practically 1 / 4 of its worth with solely small, short-lived bounces to pause the relentless promoting. Because the chart under reveals, the index has seen simply 5 countertrend rallies of 4%+, none of which lasted greater than a pair days:
Supply: StoneX, TradingView
Over the previous 6 weeks, the 400-hour exponential shifting common (100-period EMA on the 4-hour chart) has persistently put a lid on these rallies, and as of writing, the index is as soon as once more susceptible to breaking all the way down to a brand new low as bears set their sights on final week’s low within the 11,500 space. Under that zone, there’s little in the best way of notable assist till the November 2020 lows close to 11,000.
From a elementary perspective, the index has been getting hit on two sides: Not solely are the valuations buyers are keen to pay declining as and rates of interest rise, however the earnings progress for most of the mid- and large-capitalization progress names is susceptible to stalling, as current outcomes from outstanding names like Netflix (NASDAQ:) and Cisco Methods (NASDAQ:) exhibit.
On the finish of the day, sentiment towards indices and the NASDAQ 100 specifically stays closely tilted in favor of the bears. With the so-called “generals” of the market—previously-unassailable mega-cap giants like Amazon (NASDAQ:), Alphabet (NASDAQ:) and Tesla (NASDAQ:)—hitting new lows as we go to press, the trail of least resistance stays decrease. Bulls might want to see markets stabilize and the promoting dissipate for greater than a few days earlier than even contemplating the prospect of the dominant downtrend ending.
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