The E-mini Nasdaq 100 has outperformed other equity indexes during this summer’s volatile trade. A primary reason for its resiliency is that smaller companies, of which it has many, are simply more agile and globally competitive and that global production is increasingly technology driven, says Andrew W. Waldock, principal of Commodity and Derivative Advisors LLC. “The Nasdaq will lead us out of this downtrend, just as it led us in,” he says, adding that the lows are in at 1779 and a retest is unlikely. In September we could test 2050, but cautions that the down cycle in the stock market is not complete.
“Techs have been looking pretty good lately,” says Derrick P. Lewis, broker for ClearTrade Commodities Inc. He attributes recent gains to solid earnings by technology leaders including IBM and Apple and the recent firming of the U.S. dollar, which he says is responsible for the index’s rounding pattern. In September, he expects a test of 1953, the 2007 low, a breakthrough would signal renewed buying.
Garrett Jones, of Stockmarket Cycles Management Inc., notes strong support near 17500, which was retested in mid-July. He expects a hard downturn in late August and a short-term rally through November. “Bigger picture, we are not near done with this negativity. The fundamentals are horrendous; it looks like we are setting up for a low.”