Bulls came out Friday in full attack mode after a key economic report showed inflation moderating, states Jon Markman, editor of Strategic Advantage.

The Nasdaq 100 rallied to 13,181, a gain of 1.7%. Bears have been under pressure for weeks, yet they went into Friday hoping that the Core Personal Consumption Expenditures report forced bulls to rethink their offensive.

The PCE, a favored economic data point at the Federal Reserve, revealed that inflation is retreating. Technology bulls were reinvigorated. Megacaps like Tesla (TSLA) and Alphabet (GOOGL) were winners, yet the biggest gains were reserved for smaller technology firms. These shares have less liquidity and have been heavily shorted by bears.

Pain in the bear camp during April is going to be a recurring theme. Professional money managers came into 2023 with low expectations, given the carnage in tech during 2022, and the likelihood of reduced enterprise capital expenditures. By most early accounts, this is happening, yet tech stocks are rising.

The benchmark NDX is ahead 20.5% year-to-date, vs 7% for the S&P 500 (SPX) and 1% for the Dow Jones Industrials, which were hurt by tumbling bank and pharma stocks. With the first quarter now in the books, the pros need to catch up. Buying smaller caps and Big Pharma are good ways to capture alpha in a hurry. Short squeezing bears provide extra juice.

The next upside objective for the NDX is 13,750, the August high. Support is 12,585, the rising 20-day moving average.

Our NASDAQ 100 Timing Model: Members bought ProShares Ultra QQQ (QLD) on March 21 at $45.81. The 2x leveraged index fund closed Thursday at $49.57, up 8.2% from entry.

Now set up to sell half of the position at $50.10 lmt gtc, and half at $58.20 lmt gtc. Also now set a stop at $47.60 stp, effective after 11:00 am ET only.

Learn more about Jon Markman here...