5 Charts You Should Be Watching This Week
NASDAQ 100 Index - Breaking Down. Again.
I've been watching tech stocks very closely since the beginning of this year and wrote a blog post titled Is That a Top In Tech? So far it was and after Friday's price action it looks like we just put in another lower high.
Last week we took a close look at the oversold rally in tech and some levels that needed to be surpassed in order to increase the odds that a bottom was in.
We never got above those levels and after Friday's 3% decline we could be headed back to the January lows.
Are They Coming for Apple?
The recent rally in Apple was impressive but eventually, even the strongest names succumb to the selling pressure.
Was Friday's breakdown and failure to challenge the old highs a sign of things to come?
With Apple making up 12% of the NASDAQ and 7% of the S&P 500 it's probably worth paying attention to.
Interest Rates - Back to Pre-pandemic Levels
A hot topic for the last few months has been inflation. The CPI (consumer price index) rose 0.6% from the prior month and 7.5% vs. a year ago. This is the largest annual gain since February 1982. The Fed Funds Rate back then was 15% 😬
Interest rates have been heading higher and are now back above pre-pandemic levels.
If this trend continues it will more than likely continue to put pressure on technology and growth stocks in the short term.
Gold has not been doing what it is supposed to do or at least what it's expected to do and that is provide a hedge against inflation.
However, with Russia and Ukraine now taking center stage it's starting to show some signs of life as a "safe haven" asset during times of political instability.
There will be a lot of eyes on this chart this week.
For some Bitcoin is seen as another asset to hedge against inflation, currency devaluation, and political instability.
It had a good couple of weeks alongside technology stocks but the strong correlation came back into play towards the end of last week when it started to sell off with the NASDAQ.
Will this correlation continue to play out? Or will Bitcoin start to disconnect from tech stocks?
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Nothing in this blog post should be considered investment advice and is provided for educational and entertainment purposes only. The commentary and information represent the opinion of the author and are not recommendations to buy or sell any security or investment product. The author may or may not hold positions in the securities and investments mentioned. Full disclaimer here.