When we left off on Monday, it was time for the bulls to step up in technology as the insanely strong momentum streak had ended. Let’s give the bulls credit; they stepped up in a big way on Monday. However, that move was almost fully reversed on Tuesday. We have a good old fashioned tug o’ war as some of the NASDAQ 100’s largest components are set to release earnings. I will continue to take the glass half empty side and look for the index to drop below its recent low over the coming days and weeks.
As the NASDAQ 100 has been trading sideways since my various calls for its outperformance to end, the other major stock market indices have held up okay, but not much to write home about. Market internals have swung from strong to weak to improving. I don’t believe stocks are on the precipice of collapse and I would be surprised if we saw more than a routine correction between now and the election.
At 2:00pm today, the Fed will conclude their two day meeting without any action nor any new programs. It will be one of the more boring results in a while. As always, I watch how bonds, gold and the dollar behave right after the meeting through the close.
As I stated on Yahoo Finance earlier this morning, I think gold and the dollar are at inflection points. Gold is peaking and the dollar is bottoming this quarter. More on that later.
