Nasdaq100
Major technology and social components of the Nasdaq-100 were dumped this week as investors grappled with the meaning of even higher Treasury yields and rising oil prices. The sense that sticky inflation may continue to persist is a worrying factor for the actively traded stocks that make up the index.
With the 10-year Treasury yield now at 5% and West Texas Intermediate Crude back to $90 a barrel, it’s hard to argue that high inflation is about to become less severe. The unpleasant consequences that could result lead to the sale of important securities that, until recently, were pursued fiercely.
Nasdaq 100 stocks are actively traded.
Take, for example, Apple’s daily price chart.
AAPL
Apple Daily Price Chart, 10 21 23.
You can see how it peaked in July just above $197.50, sold off and is now trading at $172. The 50-day moving average (the blue line) shows how price has been unable to close above this downtrend indicator in recent times. Will the $167.50 support level from late September hold?
Comedian and social critic Jon Stewart has just left Apple TV citing problems he said the company was having with its use of China and artificial intelligence as topics. He can’t make fun of Chinese leaders and AI?
If that’s the case, it’s not a good sign for the Apple TV platform and the company that its annoying non-comedian executives are so susceptible to controversy – it’s Jon Stewart, why did you bring him in in the first place ? Apple investors might have questions.
NVIDIA Daily Price Chart
NVDA
DIA
it looks like this now:
Apple Daily Price Chart, 10 21 23.
The support level is that red dotted line that connects the late June low to the August low and the September low. If penetrated, the stock could fill the gap from late May (circled in red) when a strong earnings report led to a buying frenzy.
Note that it appears that the 50-day moving average is moving slowly. A closed gap would also be a test of the upward 200-day moving average – so, that’s going to be interesting.
Here is Tesla’s daily price chart
TSLA
Tesla daily price chart, 10 21 23.
The stock is down from July’s high of $300 to this week’s low of $211, a 30% decline over 3 months. The fact that it has fallen below the August low, a former price support level, is far from encouraging.
Friday’s earnings report fell short of expectations – but the lack of buying in Tesla may be linked to a sense that CEO Elon Musk’s botching of his $44 billion Twitter purchase lacks the vibe of “visionary genius” previously created by the financial media. Investors who are reassessing their views on his leadership qualities may reassess the wisdom of holding on to the fleet.
If Treasury yields continue to rise, it is a sign that market participants do not believe the Fed’s interest rate policy is on the right track. If the price of oil continues to rise – with events in the Middle East causing concern – previous highs could be called into question. These factors constitute key issues for the major Nasdaq-100 components listed above.
I’m no longer on Twitter — I moved to Threads.net.