Technology bulls played defense on Wednesday, pushed back by concerns about the health of the economy. The Nasdaq 100 finished at 12,967, a loss of 1%, states Jon Markman, editor of Strategic Advantage.
The losing streak for the benchmark index is now three sessions. Bulls shouldn’t worry too much. The weakness seems to be normal profit-taking after a solid run higher. And worries about economic contraction have not been a significant obstacle during the rally from the January lows.
The benchmark NDX slipped Wednesday after the ADP private payrolls report showed an average of 175,000 new corporate jobs per month in the first quarter, down sharply from 397,000 over the same time frame a year ago.
Slower job growth is not terrible. It means the Federal Reserve can ease up in its fight against inflation. More importantly, bulls managed on Wednesday to hold the line for the NDX. At the session low on Wednesday the benchmark traded down to the breakout level at 12,900 and bounced into the close.
Holding 12,900 is important, however, bulls will find even more solid ground at 12,710, the rising 20-day moving average. The next important resistance level is 13,750, the August 2022 high. Expect all interim declines to find aggressive buyers.
The NDX Loop: Members bought the ProShares Ultra QQQ (QLD) on March 21 at $45.81. The 2x leveraged index fund closed Wednesday at $47.97, up 4.7% from the entry-level.
Set up to sell half of the position at $50.10 lmt gtc, and half at $58.20 lmt gtc, and place a stop loss order at $47.20 stp.
