Bulls retreated Thursday, surrendering all of the gains won during the previous five sessions, states Jon Markman, editor of Strategic Advantage.
The Nasdaq 100 finished at 11,296, a decline of exactly 1%. At the session low of 11,252, the benchmark index tagged the 20-day moving almost on the number.
After the close Netflix (NFLX) shares zoomed 7.5% higher after the streaming media company reported a sharp increase in paid subscribers. New members soared by 7.7 million, well above the expectation of 4.6 million. The return to growth is a welcomed narrative change that could easily spread to the rest of big tech. Netflix was the first big tech company to bite the bullet and restructure its business operations.
During the past two weeks executives at Amazon.com (AMZN) and Microsoft (MSFT) announced far-reaching reorganizations. And after the close Thursday, an Alphabet (GOOGL) press release outlined a new employee bonus system.
These plans are the seeds of future growth, a narrative that bulls can use to justify higher prices. The NDX has critical support at 11,260. Resistance is now 11,402.
The QQQ Loop: The current position is the WisdomTree Bloomberg Floating Rate Treasury ETF (USFR), a cash alternative. If the NDX remains higher through Friday morning, I may add the ProShares Ultra QQQ Extra Traded Fund (QLD). I will send an intraday update if necessary. In contrast, if the NDX fails we will consider an inverse ETF.