📈 Index Signal...

The Nasdaq told us something yesterday.

Index Signal

I think that what transpired yesterday morning was extremely important to understand.

First, let’s look at what happened with the Nasdaq off the open yesterday.

You can see that we sold off dramatically.

What I marked off on the left at 8:30 AM was the reaction to Retail Sales and Jobless Claims data.

You can see how they took us over only to dump us when the market opened. We then retested the low of that bar and rejected.

What This Means

To put it bluntly, we sold off on very positive news. Retail sales, which many were unsure how it would come in because of Europe’s retailers weakening, was very strong. It beat expectations.

At the same time, jobless claims also beat expectations. That told us that the elevated claims that we saw last week were temporary due to the hurricane and nothing to be worried about.

Both of these should have been treated as very positive news by investors. But we still sold off.

On top of that, we still have yet to get over the July 11 bar on the Nasdaq, which is the day that CPI came in negative.

These are warning signs. We need to get above this level before I will feel comfortable adding significantly to tech names.

For more of my thoughts on the indexes, watch this video: