Revenues continue to dominate market discourse. A sell-off of Treasury bonds increases the difference between their falling prices and their fixed yield, causing interest rates to rise. Investors sell Treasury bills when they expect prices for goods and services to rise, a phenomenon known in professional jargon as “inflation”.
The current market story says "helicopter money" when central banks and regulators hand over cash directly to citizens – recently fiscal support for pandemic citizens in the form of stimulus measures from the Trump administration, which will now followed by an additional $ 1.9 trillion from the Biden government – will drive inflation.
And judging by the current movements on futures for the, the underlying index could become the first serious target of inflation.
Considering that major technology companies, most aptly represented by those on the list, saw massive value inflation during social constraints caused by the COVID-19 pandemic, they are now the first to come under pressure When stocks sell out. Major technology stocks have been condemned for being overvalued for a while, so this new broader risk offers investors the opportunity to make a quick profit as they consider other areas of the market that offer greater value. That includes precipitated sectors such as energy, tourism and leisure and banking.
Techniques indicate that technology sales have only just begun.
While NASDAQ futures suggested an extended sell-off for the underlying meter, note that Friday's trading produced a hammer, the bullishness of which is confirmed with a close above 100 DMA. While that shows there is still bullish energy along with a potential recovery in the MAD and RSI, dip buyers should acknowledge that the price has just completed a minor H&S top whose neckline is just above Friday's close. .
The reversal pattern pushed price below its uptrend for the first time since the March bottom, suggesting that it could receive more attention than, say, price, which has undergone numerous adjustments.
While we can witness a recovery, we expect the tech-heavy index to repeat its move lower between 50 and 100 DMAs to 200 DMAs.
Trading Strategies
Conservative traders should wait for the price to close below the hammer low, and then for a corrective rally, allowing MACD and RSI to rise. Ideally they would wait for the indicators to be over-bought, but with the price close to the reversal pattern and dotted down trend line, we don't expect there to be a chance of that, if we're right and the index will, in fact, sell off to extend.
Moderate traders would either wait for a return to the dotted line, with evidence of resistance, or for the hammer to break, and then wait for a return move for better access, if not additional confirmation of the reversal.
Aggressive traders could go short at will, provided they read this message in its entirety, understand the increased risks and accept a possible premature shortly before reinforced confirmation. Money management is crucial.
Here's an example:
Trade Sample
Entry level: 12,700
Stop loss: 13,000
Risk: 300 points
Target: 11,800
Reward: 900 points
Risk: Reward Ratio: 1: 3
