Bulls retreated on Thursday, and it was not pretty, states Jon Markman, editor of Strategic Advantage.
The better-than-expected results from Meta Platforms (META) should have sent bears scurrying to cover short positions. Although the Nasdaq 100 pushed to a 1.5% gain at the open, it was all downhill thereafter. The benchmark closed at 15,465, a loss of 0.2%.
The weakness leaves the NDX slightly above key support at 15,356, the rising 20-day moving average. Bulls should be able to hold this level but they need a stronger open on Friday to push back on the bears’ talking points.
Bears are now arguing that stocks fully reflect any potential good economic news in the second half. This is an easier case to make when companies post excellent results and their shares barely move higher. After the close Intel (INTC) posted better-than-expected financial results and shares shot higher by 7%. That’s something.
Roku (ROKU) was also trading 8.5% higher after the streaming media company beat on both the top and bottom lines.
Bulls will need more of these stories. They also need the bids to persist into the close. There is a chance that support for the benchmark at its 20-day moving average not hold. If this happens, expect a fairly swift decline to 14,820, the 50-day moving average.
That decline would not be ideal for bulls, yet they should be able to survive. Resistance is 15,932, the July 19 high, with more important supply at 16,573, the record high.
NASDAQ 100 TIMING MODEL: Members were instructed to buy ProShares Ultra QQQ (QLD)—a 2x leveraged ETF that tracks the Nasdaq 100—at $63.00 on June 28. Members then sold half of the position on July 19 at $70.59 for a 12.1% gain. Now set up to sell the second half at $75.70 lmt gtc. Set stop at 64.53 stp.
