Nasdaq 100 Nosedives as Dow Jones Holds Agency, is the Rotation Commerce Again?

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 patrons 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 widespread know-how shares had been looking for patrons, the Dow Jones loved a slight each day acquire regardless of prior turbulence and appreciable weak spot elsewhere. The disjointed value motion sparked a revival in dialogue across the reflation commerce theme which initially gained reputation early within the first quarter when massive know-how shares first started to stumble. The reflation commerce theme may 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: Day by day Time Body (March 2020 – Might 2021)

On the know-how facet, Twitter continued to hunt longstanding assist close to a set of technical ranges after the inventory sank greater than 9% on disappointing steerage final week.

Amazon (AMZN) Value Chart: Day by 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: Day by day Time Body (Might 2020 – Might 2021)

Then again, 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 corporations like Norfolk Southern (NSC) and Exxon Mobil (XOM) notched notable beneficial properties. Whereas the broader indices provide a chicken’s eye view of rising tendencies, single-stock evaluation can present deeper perception and only a few charts from the 2 themes recommend a continuation of Tuesday’s value motion could also be forward.

To that finish, anticipate 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