E-mini NASDAQ-100 Index Continues Slide Amid Search for Value

James Hyerczyk
Updated: Apr 29, 2022, 20:35 UTC

Smart money is getting out because no one really knows what value is during a rising interest rate environment.

E-mini NASDAQ-100

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June E-mini NASDAQ-100 Index futures are lower shortly after the cash market close on Friday as disappointing forecasts from Amazon and Apple pushed the technology-weighted index toward sharp monthly declines, with the biggest surge in monthly inflation since 2005 adding to investor worries.

At 20:05 GMT, June E-mini NASDAQ-100 Index futures are trading 12837.75, down 617.00 or -4.59%. The Invesco QQQ Trust ETF (QQQ) is at $313.24, down $14.77 or -4.50%.

Amazon, Apple Weakness Weigh on Index Inc slumped 11.9% to a near two-year low as higher costs hurt first-quarter results and the e-commerce giant said it expects to lose as much as $1 billion in operating income this quarter.

Apple Inc, the world’s most valuable company, slipped 0.1% after its glum outlook overshadowed record quarterly profit and sales.

US Economic News

Data showed the personal consumption expenditures price index (PCE), the Fed’s favored measure of inflation, shot up 0.9% in March – the largest gain since 2005 – after climbing 0.5% in February.

Another Double-Digit Monthly Loss

The NASDAQ is down over 10% in April, putting it in course to match double-digit monthly losses last seen during the height of the pandemic-led selloff in March 2020 and the financial crisis in 2008.

Disappointing results and worries about aggressive interest rate hikes by the Federal Reserve have hammered megacap technology and growth stocks throughout the month.

Daily June E-mini NASDAQ-100 Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 12801.50 will signal a resumption of the downtrend. A move through 14298.00 will change the main trend to up.

The minor trend is also down. A trade through 13583.75 will change the main trend to up and shift momentum to the upside.

Short-Term Outlook

The index seems to have enough downside momentum to challenge the March 5, 2021 main bottom at 12179.50. It also looks like we’re not even close to bottoming. We could continue to see short-term retracements, but don’t expect a lengthy rally until a solid support base is built. By my calculations, buyers haven’t even started the process yet.

Looking at the chart and comparing the current price to a support level in the past isn’t working at this time. For years investors did that, but that was when interest rates were near zero. You didn’t have to be an expert or a guru to pick winning stocks. Now you have to actually think about what you’re doing and which stocks you are picking.

Now the process has changed. Smart money is getting out because no one really knows what value is during a rising interest rate environment. Once they determine value then the smart buyers will return. Until then, look for more downside pressure and the selling of rallies.

First it was Facebook (Meta), now Amazon. Too many investors were in these two stocks plus the other FAANG stocks. Time to spread the money around instead of going with the herd and chasing momentum stocks.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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