Nasdaq 100 & Dow Jones Forecast:
Nasdaq 100 Nosedives as Dow Jones Holds Agency, is the Rotation Commerce Again?
The Nasdaq 100 spiraled decrease Tuesday as weak spot in know-how shares and discussions round potential fee hikes spurred promoting exercise. Consequently, the tech-heavy index fell to its lowest degree since early April earlier than discovering consumers round technical assist at 13,400. After a day of declines, the Nasdaq 100 formally closed 1.88% decrease.
Nasdaq 100 Value Chart: 1 – Hour Time Body (February 2021 – Might 2021)
Whereas the Nasdaq 100 and common know-how shares have been trying to find consumers, the Dow Jones loved a slight each day achieve regardless of prior turbulence and appreciable weak spot elsewhere. The disjointed worth motion sparked a revival in dialogue across the reflation commerce theme which initially gained recognition early within the first quarter when massive know-how shares first started to stumble. The reflation commerce theme will be roughly measured by way of a ratio of the Nasdaq 100 to the Dow Jones.
Nasdaq 100 to Dow Jones Ratio Dives Decrease
This ratio fell to its lowest degree since late March on Tuesday, regardless of modest strikes in US Treasury yields which had been the newest catalyst behind weak spot in know-how shares. The broader macro development, whereas readily obvious within the efficiency of the indices, was additionally obvious in single-stock names from every sector.
Twitter (TWTR) Value Chart: Each day Time Body (March 2020 – Might 2021)
On the know-how facet, Twitter continued to hunt longstanding assist close to a group of technical ranges after the inventory sank more than 9% on disappointing guidance last week.
Amazon (AMZN) Value Chart: Each day Time Body (July 2020 – Might 2021)
Whereas Twitter might must grapple with lingering results of its earnings report, Amazon was one other know-how inventory that sought technical help regardless of a outstanding quarterly report final week. Additional nonetheless, the mega-cap know-how inventory has been locked inside a buying and selling vary since September.
US Metal (X) Value Chart: Each day Time Body (Might 2020 – Might 2021)
Alternatively, US Metal surged to its highest degree since mid-March because the inventory added to its uptrend that started in October. US Metal was not an outlier as firms like Norfolk Southern (NSC) and Exxon Mobil (XOM) notched notable positive factors. Whereas the broader indices provide a chook’s eye view of rising tendencies, single-stock evaluation can present deeper perception and just some charts from the 2 themes recommend a continuation of Tuesday’s worth motion could also be forward.
To that finish, count on additional weak spot within the Nasdaq 100 ought to assist in a few of the main know-how shares fail. Within the meantime, observe @PeterHanksFX on Twitter for updates and evaluation.
–Written by Peter Hanks, Strategist for DailyFX.com
Contact and observe Peter on Twitter @PeterHanksFX