The Nasdaq 100, often used as a proxy for tech and other high-growth stocks, still has just under 1% to go until it crosses highs set at the end of April. This group had been punished by rising interest rates and inflation fears.
Now the Nasdaq 100 has entered a waiting period, according to TradingAnalysis.com founder Todd Gordon.
“It’s early summer here and we’ve seen a triangular consolidation,” Gordon told CNBC’s “Trading Nation” on Thursday. “We’re actually in a triangular consolidation in the indices with a lot of distracting sub-themes like actions memes that really don’t have a big impact on what’s really going on. ”
Whether the index goes up or down could depend on the next reading of the consumer price index, he added.
“This is a 30-year CPI chart, and connecting the two major highs of the 1990s and early 2000s, we just fell into resistance at a 5% year-on-year change. very indicative of the continuation of this rotation towards interest rate sensitive sectors and of the reopening such as finance, industry and energy and inflation, ”said Gordon.
“If we fail, however, it could start to suggest that the technology could see a pullback and that we could come back in. [the sector]Gordon said.
The XLK S&P 500 tech ETF rose 8% this year, weaker than the 13% gain of the S&P 500. The QQQ Nasdaq 100 ETF, which owns mega-cap tech stocks such as Apple and Microsoft , is also 8% higher in 2021.