Bulls continued Friday to buy the dip, a certain sign that sentiment remains strong, states Jon Markman, editor of Strategic Advantage.
Despite a near 1% opening decline, the Nasdaq 100 finished at 12,767 up 0.3%. For the week the technology-heavy NDX was up 2%, far outpacing the broader S&P 500.
The shares of large technology firms have entered a sweet spot. Prices are being pushed higher by a combination of flight to safety liquidity and falling interest rates. Although Federal Reserve Chair Powell is talking about another increase to the federal funds rate, the yield for the ten-year Treasury note sank Friday below 3.4%, the lowest level since September.
There is major technical resistance for the NDX at 12,880, and a close beyond that level will force bears into frantic short covering. The next critical resistance level is 13,750, the August 2022 high. Given the tumult in banking, that move would be a shocker for bears. It would also end their 12-month reign of terror. There is interim support at 12,353, and 12,160, the 20-day, and 50-day moving averages, respectively.
The NDX Loop: Members bought the ProShares Ultra QQQ (QLD) on March 21 at $45.81. The 2X leveraged index fund closed Friday at $46.74, up 2% from the entry-level. Set up to sell half of the position at $50.10 lmt gtc, and half at $58.20 lmt gtc. I am looking to add a second-half position either into a large decline or following the first close for the NDX above 12,900. I will provide the entry-level via an intraday update if applicable.