Looking for a signal for when the Nasdaq will start working again? Look at the former stars that have fallen. (November 23, 2018)
NDX--X FB FFTY FB QQQ FB AMZN AAPL NFLX NVDA GOOGL QQQ
The Nasdaq ( INDEXNASDAQ: NDX ) has been outperforming the overall market, that is, if you are short. This thing has absolutely been sucking on the tailpipe of an old Edsel that’s been staying in the barn for too long; just really, really brutal.
So when are we going to see this start to stabilize at least? I am telling you, it is still all about the FANGs. Until the leverage/high growth trade gets unwound these stocks are still going to be under pressure. Once they stop moving lower and start at least finding bases, that is when you are going to be wanting to be buying these stocks, right?
Actually no. I wouldn’t be touching any of these stocks right now unless I had an absolute absence of creativity or for some reason just was fixated on a small group of stocks. These are like yesterday’s news. I am not telling you anything you don’t already know but for some, I might just be telling you stuff that you don’t want to hear. Let’s go through these on the weekly chart.
The Nasdaq 100 ( INDEXNASDAQ: NDX ). These stocks, the very, very highest cap stocks are the ones that have the biggest weight on the Nasdaq 100 ( INDEXNASDAQ: NDX ). That’s the one that a lot of growth traders look at.
They also look at the FFTY ( NYSEARCA: FFTY ), the IBD 50. Even though none of the stocks that we are looking at are in the IBD 50 ( NYSEARCA: FFTY ) we need to be watching the IBD 50 ( NYSEARCA: FFTY ) along with the QQQs ( NASDAQ: QQQ ) and that starts with Facebook ( NASDAQ: FB ). Until Facebook ( NASDAQ: FB ) stops being “Faceplant” look for lower lows.
Amazon ( NASDAQ: AMZN ); I don’t know how much lower it is going to go but my bet is it could hit, let’s just say, 1300.00 before it hits 1900.00. I’ll just say, “How much money is there to be made on the upside?” That, in my view, is pretty questionable.
Apple ( NASDAQ: AAPL ) continues to fall from the tree. This stock just looks like it has no bottom. It does but here’s the thing: I would love to own Apple ( NASDAQ: AAPL ) because I could say, “You know what? We are not going to be leading the industry anymore but man we’re banking boatloads of bucks. And now I can just kind of hang out, maybe work on my golf game, if I liked golf, or do something. But I don’t really have to do too much; I am making so much money in my little company called Apple it’s like I am printing money. I’ll let other people worry more about growth. I’ll just keep doing what I am doing.”
That is literally the way I think you have got to look at the company. There have been a lot of companies, a lot of different technologies that have kind of been nipping at their heels. And the market is factoring in Apple ( NASDAQ: AAPL ) not being the leader in the next big move higher and that is just the way it is.
Netflix ( NASDAQ: NFLX ), I’ve got the three circles here, this is a classic head and shoulder pattern that really is now just resolving to the downside.
NVIDIA ( NASDAQ: NVDA ); you don’t want to go near this stock. There is a lot of talk about this is the whole Bitcoin thing. Because Bitcoin, mining, it costs more money to mine Bitcoins than the Bitcoins are worth. It’s kind of like mining fools gold. And so because of that the NVIDIA ( NASDAQ: NVDA ) chips, which were very efficient at that, aren’t really in such high demand. I don’t know about any of that, I read the stories just like you do. I just look at this chart and there is nothing about this stock that I want to own. It looks like it is a little bit overdone to the downside. But just because something is overdone to the downside doesn’t mean I want to buy it.
And then lastly, Google ( NASDAQ: GOOG ) is down to $1000.00 or so. There is no reason why this stock can’t go lower as well. I can think of a lot of reasons why it can’t really go too much higher. And that is because, as I look at this chart, all I see is a red box of pain from everybody who was buying Google ( NASDAQ: GOOG ) on the way down.
Let these stocks settle out before you start looking at the tech market ( NASDAQ: QQQ ) as a proxy for growth.
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