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📈 S&P500/Nasdaq 100: Correction and then straight on after the big expiry day?

The end of the trading week was a big expiry day, and some shorts apparently had to be covered all week. Individual stocks, especially from the technology sector, showed strong price volatility. This was also evident on the last trading day with an upward fuse. On the other hand, some institutional investors apparently only extended their short positions, as the index fell again towards the end. I assume that there will be a few more openings of short positions next week, which could lead to a fall to the 10-week line. That would be about a 4% correction, the secondary correction scenario would be a maximum 10% correction of the index.The dynamics and above all the volume after the first trading days of the "Magnificent 7" will be relevant for me, but at present this correction is no reason for me to reduce my investment quota with a focus on technology. I will simply continue to review my positions and make sure that my shares do not produce any price gaps and do not become too volatile.The Nasdaq100 also shows this picture, and the divergence between price development and market breadth (A/D indicator) mentioned last week is, to my astonishment, diminishing in such a way that the market breadth is rising again and not the market falling. Also, despite all-time highs, greed is very low and I expect a brief dip into fear territory, which is a buy signal for me on the CNN fear and greed indicator.


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Comments

What do you think about the valuation revision as the cost of money becomes higher with increased interest rates? Given the long-term outlook, it seems that the market needs to discount future revenue from big tech due to the increased price of money. This revenue is far in the future, a factor that has already impacted valuation of smaller tech companies. However, big tech firms in major indices are still valued with high ratios.
22 Jun