Nasdaq extends rally to affirm long-term bull cycle….

Central banks (ECB/Fed) remained concern that the economic risk remains tilt to the downside. This means that the window for more rate rises has closed, at least for the time being. Investors like this new accommodative monetary regime.

In the US, many tech stocks have rallied hard over the past 15 weeks. Many counters broke new highs. The QQQ ETF, for example, is on the verge of an upside breakout (see Featured Chart). I have highlighted recently that US indices appear to be cruising into new highs. Spearheading this charge is the Nasdaq/tech sector.

Look at Cisco System (see below). Prices staged the biggest advance in years. Others like Microsoft, O’reilly Autonomative, Intuitive Surgical, Starbucks all made new long-term highs.

New price highs renews interest in stocks. This creates a self-feeding momentum. Hence, I expect more momentum buyers to jump on the bandwagon, although some stocks are overbought and a shakeout is possible.

 

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