Bears were propped up on Monday by regulators and politicians in Washington DC. It didn't matter. In the end, the Nasdaq 100 closed at 15,122, down only 0.3%, states Jon Markman, editor of Strategic Advantage.
The weakness for the benchmark masks what was a positive session for bulls. They fought back hard at the session lows.
The NDX traded down to 14,932, significantly below the 20-day moving average. Bulls could have given up after the Commerce Department announced new restrictions on the sale of artificial intelligence chips to China. The ban does not hurt Nvidia (NVDA) in the short term. Its AI chips are sold out for the foreseeable future.
However, the ban is a further escalation in the cold war with China. Ultimately, that market seems to be going away and that is a longer-term headwind for technology firms. Unfortunately for bears, they spent most of the morning covering short positions. The early weakness was shallow and short-lived.
And just when it seemed as though bulls might reassert, stocks careened lower again amid ongoing political wrangling over the speakership for the U.S. House of Representatives. This is still the bulls’ market to win because they continue to climb the wall of worry. This is bullish.
Winning the narrative battle is most of the war. Still, bulls need a close for the NDX above 15,300 to spook bears. Major support is 14,997 at a close.
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