Nasdaq Hits Another High, GME and AMC Soar - Are They Telling Us Something?
NASDAQ PRICE, CHART, AND ANALYSIS
- Tech stocks may be betting on Jay Powell delaying a taper timetable announcement.
- Meme stocks back in the spotlight.
The Nasdaq Composite Index broke above 15,000 on Tuesday, while the Nasdaq 100 printed around 15,380, both new highs for the tech-dominated indices. While tech has been in favor for many, many months due to the Fed’s ultra-loose monetary policy, recent price gains in these indices have leveled off with traders looking ahead to this week’s speech by Fed chair Jay Powell at the virtual Jackson Hole Symposium. The Fed chair had been expected to announce a timetable for reducing the $120 billion a month bond-buying program - a negative for the tech sector - but these expectations have been pared back of late, witnessed by the 600 point rally in the Nasdaq 100 over the last week. Is the tech sector further building in expectations that chair Powell will give little away in his speech on Friday?
NASDAQ 100 DAILY PRICE CHART (SEPTEMBER 2020 – AUGUST 25, 2021)
Two of the most high profile ‘meme stocks’ of the last few months, GameStop (GME) and AMC Entertainment (AMC) surged yesterday by 27% and 20% respectively. These stocks have benefitted from the Fed’s loose monetary policy and the US stimulus check program, with interest whipped up by the Reddit crowd’s enthusiasm to fight back against short-sellers in these stocks. Short market interest in both these stocks remain, but not at the elevated levels seen at the start of this year, leaving them open to further volatile price swings around this Friday’s meeting. Yesterday’s rally saw both AMC and GameStop jump to fresh multi-week highs.
AMC Entertainment (AMC) Daily Price Chart – August 25, 2021
GameStop (GME) Corp Daily Price Chart – August 25, 2021
What is your view on the Nasdaq – bullish or bearish??
By Nick Cawley, Strategist. 25 August 2021. DailyFX
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