The Nasdaq’s (QQQ) failed rallies several times this year are testing the bullish investor. More recently,
the technology-heavy index tried several times to break past the 50-day simple moving average. When it
failed last week, the index lost 3.85%. It is down by 18% for the year-to-date.
When will the bearishness end?
Apple (AAPL) peaked at around $180 earlier this month before selling off sharply. Apple may have a
harder time selling its expensive devices. Inflation is increasing the cost of food by at least 30%. The CPI
may print 6.7% in Canada and higher in the U.S. The real rate depends on the consumer’s spending
habits.
Amazon (AMZN), which is heavily weighted in the Nasdaq, lost ~ 5% last week. The company raised its
Prime rates. It risks losing subscribers, just as Netflix (NFLX) will after hiking rates.
Microsoft (MSFT), whose Office 365 is cash-generating and who benefits from strong Windows system
sales, is on a downtrend. Even Google (GOOG), whose search engine and YouTube enjoy strong profits,
lost 5.6% last week.
The strong selling in leading companies mentioned above will pressure nearly all other tech stocks. The
index will need strong quarterly results from Meta Platforms (FB) to reverse the bearish sentiment. If
that fails, the index risks re-testing lows not seen since 2020.
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