This Week’s Going to Be Interesting
Despite the Nasdaq Composite ending last week down 1.1%, the other major benchmarks ended the week higher. The trend for all of them, including the Nasdaq Composite, is still, up.
But there were minor cracks in the yellow-brick road last week.
A big crack developed on Monday when the Nasdaq 100 (NDX), an important index of the biggest 100 (non-financial) stocks listed on the Nasdaq, rose 2% in the morning, breaking through to new all-time highs, then collapsed spectacularly, ending the day down more than 2%.
Then on Thursday Netflix reported earnings that disappointed investors, who sold the stock down 6.5% on Friday, to a level that pierced its 20-day moving average to the downside.
The hit to the Nasdaq, as stunning as it was on Monday and as mildly down at the end of the week as it was, was still worrisome.
It hasn’t been often, in the last 12 years that the Nasdaq Composite’s been down while the other major benchmarks have been up strongly. Last week, while the Nasdaq Composite fell 1.1%, the Dow gained 2.3% and the S&P 500 gained 1.2%.
On top of it all, the volatility index of the Nasdaq, the VXN, has been trading above the volatility index of the S&P 500, VIX, which it hasn’t done since both indexes fell in February and early March.
This week, on the Big-Tech earnings front, we get to see Microsoft’s numbers and Tesla’s numbers on Wednesday and Amazon’s numbers on Thursday.
All eyes are now on earnings, especially tech earnings, especially after Netflix took a big hit on Friday on its earnings.
The trend, for all the benchmarks, is still up. And it’s going to take a hard knock, probably coming from the tech sector’s earnings to reverse the market’s direction.
That’s not likely, but what everyone should be watching for.