News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • And the Monday Asia trading session has officially begun. A pair to have on your watch list to kick off early trade: $AUDUSD post head-and-shoulders' neckline (and 200-DMA) breakdown https://t.co/iuYqEN5xpv
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Find out about the recent history of ISM data, how to track it, and how to trade its release here: https://t.co/MZtBh88nOv https://t.co/DIP9cgoSUt
  • Here are the top scheduled event risks on my calendar for the coming week. Global PMIs, a few rate decisions, the Fed's bank stress test results, the Fed's favorite inflation indicator and a run of Fed speak among much more: https://t.co/3jIl4PvHiA
  • I know it is a cognitive bias, but it seems that every time I take a day off, there are significant market moves. Dow's tumbled into a 5th straight session Friday with 10-day correlation to Nasdaq most extreme negative in 4 years https://t.co/V3U6IOAEXz
  • *Reminder: Weekly Strategy Webinar tomorrow morning at 8:30am EST (12:30GMT) on DailyFX!! - lots to discuss on the back of last week's #Fed Fireworks! https://t.co/lxd5fZnn4H
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/l0j9vLrMIp
  • Markets Week Ahead: Gold, Dow, Pound-Dollar, BoE Rate Decision, Fed Risk, PMIs Check out my recap of last week and preview of upcoming event risk, plus all the latest forecasts from the @DailyFX team below. Link to Analysis - https://www.dailyfx.com/forex/fundamental/forecast/weekly/title/2021/06/20/Markets-Week-Ahead-Gold-Dow-Pound-Dollar-BoE-Rate-Decision-Fed-Risk-PMIs.html $GLD $DJI $GBPUSD #Trading
  • Traders focus a lot of their energy on spotting the perfect time to enter a trade. While this is important, it is ultimately where traders choose to exit trades that will determine success. Learn about the three types of trading exit strategies here: https://t.co/muYkTNXH7s https://t.co/hbZPJmoOHe
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqhRoMG https://t.co/C0i7u1dDKL
  • What suits your style of trading stocks or commodities? Find out what are the differences in these two markets here: https://t.co/BnA07cMV0s https://t.co/Q69HKBXeKH
Nasdaq 100 Forecast: Exodus from Tech ETF Has Worrisome Historical Parallel

Nasdaq 100 Forecast: Exodus from Tech ETF Has Worrisome Historical Parallel

Peter Hanks, Strategist

Nasdaq 100 Price Outlook:

Nasdaq 100 Forecast: Exodus from Tech ETF Has Worrisome Historical Parallel

Technology stocks were the driving force behind the covid-recovery rally in stocks, but have recently become an area of weakness for the Nasdaq 100, Dow Jones and S&P 500. Lockdown beneficiaries like Netflix, Zoom, Microsoft and Apple have seen their stock prices falter in recent weeks as investors scrutinize lofty valuations and traders attempt to call a top. The shift in demand for this sector of the market has been reflected in exchange traded fund flows, particularly in the case of the QQQ ETF.

QQQ etf price chart and nasdaq 100

The QQQ ETF, which closely tracks the tech-heavy Nasdaq, saw its largest single-day outflow since October 19, 2000 last Friday when more than -$3.4 billion left its coffers. The withdrawal is the second largest in the fund’s history and helps highlight the conviction behind some of the recent selling pressures in technology stocks.

ETF vs Stocks: How to Choose the Best Investment

That said, the conviction expressed in Friday’s withdrawal is not without a counterpart as the fund saw its second largest inflow on record this Monday, September 21, the next available trading day. Interestingly enough, the sudden exodus and influx parallels the prior records in 2000 as the October 19, 2000 exit was immediately succeeded by an inflow of more than $5.2 billion the very next day.

qqq etf fund flows and nasdaq 100 prices

Evidently, it is not unheard of to have extreme allocation changes in close proximity, and in fact it may suggest the flows are indicative of broader market themes than a one-off event. In October 2000, the Nasdaq fell by nearly -10% and was in the midst of the bursting of the Dot Com bubble. Collectively, the Nasdaq declined roughly -35% in 2000, which also happened to be an election year.

Shift forward to 2020 and in some ways, the Nasdaq 100 finds itself in a similar situation. First, an unforeseen factor caused equity valuations to decline significantly which was followed shortly thereafter by a Presidential election. While the extraneous threat to the economy is entirely different and the political landscape has morphed into an unrecognizable cacophony compared to what it was two decades ago, similarities in asset prices can be noted – at least to some degree.

Largest ETFs by Assets Under Management

That being said, past performance is not indicative of future results and claiming technology stocks will suffer a similar fate in 2020 as they did in 2000 would be incredibly presumptuous. Nevertheless, the magnitude of capital movement in the QQQ ETF at both points in history might help highlight the gravity that weighs on the market.

Either way, technology stocks have developed technical deficiencies on the back of recent weakness and worrisome similarities have emerged. With a looming Presidential election poised to create further volatility, the Nasdaq may be vulnerable to further declines in the coming months. In the meantime, follow @PeterHanksFX on Twitter for updates and analysis.

--Written by Peter Hanks, Strategist for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES