Better Days Ahead?
The Nasdaq continues to shine. It is now higher by 4% YTD, lagging slightly behind the S&P 500, but both are dealing with big round numbers currently. The Nasdaq could be on the verge of a meaningful breakout higher from this long cup base, something the S&P 500 has already done. Is it ready to play catch up? I would say yes with the familiarity from the level a couple of years ago. The tech-rich benchmark has never CLOSED above 16000 on a MONTHLY basis, although it was above it intra-month in November 2021. However, it CLOSED 700 handles from its peak at that all-time high that month, recording a bearish gravestone doji candle, whose drawdown did not end until the very round 10000 level in late 2022 (we spoke of this 13 months ago). Now a breakout could be upon us, with plenty of bears still shouting, which could fuel the fire. Software and semiconductors are firm, and “old tech” stocks like IBM and CIEN are prospering (JNPR was recently purchased). With all the rug pull chatter I have been hearing recently, those covering short positions and new organic buyers could create a recipe for success.