Technology bulls on Friday held their own despite broader market weakness. The Nasdaq 100 (NDX) closed at 13,080, a loss of only 0.2%, states Jon Markman, editor of Strategic Advantage.
The tech-heavy NDX still gained 0.1% for the week, and the uptrend from the October lows remains solidly intact. Tech stocks since October have been the clear market leaders. Big capitalization tech companies in January survived an onslaught of analyst downgrades. Researchers worried then about slowing corporate spending following the rise in interest rates. Bulls looked forward. They rode a wave of big tech cost cutting, then enthusiasm for artificial intelligence.
Narratives focused on the future trump analyses of the here and now. Stock prices are about the future, not the past. All of this adds up to bears being in big trouble. Interest rates peaked in October when the yield for the 10-Year Treasury note soared to 4.3%. The current yield is 3.5%, and it is likely to fall further heading into May 2, when the next Federal Open Market Committee meeting convenes.
There is solid support for the NDX at 12,850, then 12,520, the 50-day moving average. Expect bulls to be extremely aggressive into a decline to the lower level. There is no significant resistance until 13,750, the August 2022 high.
MCI Market Timing Engine
Our system expects a significant summer rally, yet trade has been choppy. The system is likely to re-entering a leveraged Nasdaq 100 index fund soon.