NASDAQ is bid, although suppressed by high oil and yields and squeezed into a tight trading range. Can it breakout or sell off? We shall see.
The Reflation trade is (slightly) back on, as noted with these posts (1, 2) on expectations that the Federal Reserve may not be as harsh with interest rates. But, the market is buying hopium, with the Chart 1. showing the very tight range that the NASDAQ futures ae trading within 11865 and 12596. Essentially they are oversold markets, but, the high oil price and yield on the 10 YR treasury will ensure that any major rallies with speculation i.e Tech stocks, will be muted. Note with Chart 2 the parallel lines indicating March 07 (oil at $115) and May 05 (yield at 3%), are the two points of a major sell off for the NASDAQ in correlation with its inverses trade via the tech index. The white arrows (Chart 1) shows the price pressures of the 10 yr/oil and U.S. Dollar, which all trade opposite to the NSADAQ price/s.
Chart 3. For a 0.44% or 53 point drop within three days.
A full reversal from a bear trade to bull would be the oil descended under $100 and yields moving down towards 2% .
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