Tech bulls rang in the new year with a thud. An opening rally Tuesday for the Nasdaq 100 (NDX) fell apart only one hour into the session, states Jon Markman, editor of Strategic Advantage.

After pushing as high as 11,093, the benchmark NDX closed at 10,863, a loss of 0.7%. It could have been worse, though. The index did trade down to 10,771 in the middle of the session. 

Even with the late and not-so-great rally, bulls simply can’t get it together. Bears have overwhelmed every advance. The only silver lining is the biggest tech stocks are very deeply oversold, and Wall Street analysts are extraordinarily bearish. 

These are key ingredients for a violent oversold rally. Unfortunately for bulls, any rally for the NDX will likely be capped at 11,402, the current 50-day moving average. On the flip side, bears will lean more aggressively on the benchmark if they can force a close below 10,671, the December 28 low. Piercing that level should bring an immediate test of 10,441, the October low. Beware.

The QQQ Loop Trade: The current position is the WisdomTree Bloomberg Floating Rate Treasury ETF (USFR), a cash alternative.

I am still waiting for a low-risk trading opportunity. The trading range will be resolved sooner than later. I am prepared to take trades in either direction. I know it’s hard to wait but be patient. It doesn’t take many trades to post a successful month and year.

Learn more about Jon Markman here...