Thursday's Market Minute: Trends Are Your Friend

With the Nasdaq-100 pushing to new all-time highs this week, let’s take a look at a few existing trends – remember, they’re your friend. The stay-at-home trade and some of the fundamental trends the pandemic has created have added to the lift in tech. We’ve seen some major beneficiaries, and one of them has been the broader index as some of the individual names that are closely watched – like Amazon.com, Inc. (NASDAQ:AMZN), Facebook, Inc. (NASDAQ:FB), Netflix, Inc. (NASDAQ:NFLX), and Apple, Inc. (NASDAQ:AAPL) – helped it trade up this week to $11,141. The NDX has been leading the broader market higher since bottoming out in March and has closed lower on eight weeks since the pandemic low of $6,771. The NDX needs to hold above $10,000. Another well-defined trend has been Gold and the move up we’ve seen off the August 2018 low around $1,157; this week Gold traded above $2,070. The bid in Gold comes from massive stimulus measures to combat the impact the pandemic will have on global economies and low rates (this week the short end of the curve posted new lows). Gold needs to hold above $1,950. Lastly, the U.S. Dollar has been trending lower as the $DXY got to the mid-$92 handle this week. This remains intact as long as we stay below the $97 level — above it, and I’d begin to question it. Trends occur across all timeframes, from the more granular intraday charts to the bigger picture daily and weekly looks at price activity. Whether you’re the kind of trader who likes to fade or participate in current trends, it’s essential to identify them. Keep an eye on the three mentioned above: a shift in existing fundamentals, and ultimately price or current trends we’ve seen is when the next bit of volatility will occur – for now, it’s just a waiting game, my friends.