Bulls were upended Friday as another red-hot US economic report dashed enthusiasm from the previous session, states Jon Markman, editor of Strategic Advantage.

The Nasdaq 100 skidded 1.7%, to 11,970. At session lows, the NDX tested its 200-day moving average at 11,908. While bulls did recoup some of the early losses, they are losing the narrative war with bears. The core personal consumption expenditure report on Friday showed continued inflation at the consumer level. The yield for the Ten-Year Treasury bond rose to 3.95%, the highest level since November 2022.

Bears argue that the valuations afforded to growth stocks are too generous given higher interest rates. For them, it is simple math. Unfortunately for bulls, the tech-heavy NDX is full of these stocks. The weakness on Friday negated all of the gains won on Thursday when shares of Nvidia (NVDA), a richly priced semiconductor firm, surged 14%.

Bulls face considerable resistance for the NDX at 12,201. They must retake this level as soon as possible to push back against bears and avoid a fierce and bloody rout. Watch critical support at 11,908. Losing that level will mean a quick decline to 11,718.

The QQQ Loop: Members bought the ProShares Ultra QQQ (QLD) on Feb. 10 at $43.67. Unfortunately, the position in the two-times leveraged index fund was closed Friday on stop at $41.10, a 6.1% loss. This was our third setback on the Loop and I will do everything possible to ensure it is the last, at least for a while.

Use the proceeds to purchase the WisdomTree Floating Rate Treasury ETF (USFR), a cash alternative. In the fund, you will collect a 2.15% annual yield in a virtually risk-free instrument while waiting for our next recommendation.

Learn more about Jon Markman here...