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  • Nasdaq 100 extends gains and hits fresh intraday record highs. 
  • Tech sector still in vogue as lockdowns still in use.
  • Will a vaccine halt the rally? Goldman Sachs warns investors.

Nasdaq 100 NDX again hits fresh highs intraday Thursday and looks set to continue its winning streak. The Nasdaq has closed higher for the last six days in a row.  That looks set to be seven with the index at 11,200 at time of writing.

The gift that keeps on giving

Being long the Nasdaq NDX since March, this year has been a one-way ticket.  The Nasdaq NDX has bounced 60% from the March lows.  Other indices have followed but none quite as strongly as this.  The global lockdowns have of course benefited big tech.  Amazon (AMZN) is now the global high street, Netflix (NFLX) the global TV station and Facebook (FB), Google (GOOG) and Apple (AAPL) have all seen huge growth in revenues. 

The Trumpet

Trump, of course, is loving this surge in markets, claiming a Biden election victory in November would bring everything crashing down. Well no-one can predict the future but is it time to start questioning the trend?  Biden is still the favourite. Goldman Sachs noted on Wednesday that the markets are under-pricing a coronavirus vaccine.  A vaccine should bring us back to more normalized conditions by late 2021.  So a shift from tech to value and cyclicals may start to become the smart play.

Timing is everything

A vaccine is still months away and second waves of infection seem to be occurring repeatedly across the globe meaning people retreating to a more lockdown mindset.  This obviously helps big tech.

But markets generally are forward-looking so as better and better Phase 3 vaccine data begins to filter out the time will come to exit tech.  So, for now, the day traders, the Robinhoods are in control but soon the era of Buffets will return. Be ready.

Technical view

Short term the Nasdaq has no real headwinds, new record highs so no resistance levels!  10,316 the low from July 24 maintains the bullish trend, a break would be negative. 9,751 the high from March would then be the next support. 

There is potentially an argument for the 10,316 low being the first lower low of the uptrend with a double top showing on July 13 (11,065) and July 21 (11,068).  If Thursday’s close is lower (unlikely) back below this double top then technically we are looking bearish and we will just have witnessed a false upside break.