Nasdaq Bounces Where It Needed To:
From top to bottom between the intraday highs on 9/7 and lows on 10/4 the Nasdaq fell 8%. Of course, some names fell much more than that but just talking about the tech-heavy benchmark, it made a “stick save” Monday just where it needed to. Back in late June (spoke about it here specifically in our 6/25 Technology Note) after the Nasdaq broke above a bullish ascending triangle pivot of 14200 we declared a measured move was now upon us to the very round 16000 figure. Now we know most breakouts are retested to prove their validity, and Monday it almost precisely tested that 14200 number. And give the index credit as it bounced firmly on “Turnaround Tuesday”. It still has work to do and there are many naysayers, some of whom I respect very much, and we will see how this plays out. The Nasdaq was wounded with the hits that FB PYPL ADBE and AMZN endured. If these names can rebound, a big Q4 will push the major average toward its 16000 target. Keep in mind technology is coming off big back-to-back yearly advances as the XLK was the best major S&P sector performer by big margins in 2019-20. There will be no three-peat, but certainly can run and do better than its present 5 best of 11 major S&P groups into year-end.