Nasdaq 100 Breaks Below Uptrend As 10-Year Yield Crawls Higher. Also: NVIDIA And Palo Alto Networks.

Commentary and price chart analysis

It’s a peculiar dynamic where NVIDIA is expected to exceed expectations.

So, when it does so, the actual expectation is met rather than exceeded. The afterhours price of $736 is below the early February 2024 high of $743, quod erat demonstatum. How it trades by Thursday’s open may be different.

Here’s the daily price chart as of the close Wednesday:

The red arrow indicates the level at which it’s trading afterhours while I’m writing this, $736. You can see how, so far, no new high has been established despite the CEO hyping what he calls “a tipping point.”

It wouldn’t be surprising to see a higher high with a steady deterioration in the relative strength index and then erosion may set in.

From the standpoint of its effect on the Nasdaq 100, NVIDIA’s pop may not be enough for the index to regain momentum.

One problem is the seriousness of this morning’s gap down in Palo Alto Networks following a much less than expected earnings release by the cybersecurity company.

Palo Alto Networks daily price chart is here:

That’s all the way back to just above the 200-day moving average in just one trading session and the gap down is huge: from $360 to $260 amounts to a 27.78% slide. Note the very heavy volume accompanying this trading, a confirmation of the move.

So, now the Nasdaq 100 daily price chart looks like this:

The index seems unlikely to move to a higher high soon, even with a NVIDIA blast upward in the morning during the real session. So, tipping point indeed, just not the kind the Jensen Huang is so excited about.

More importantly for markets as a whole was the small but steady upward trend in the yield of the U. S. Treasury’s 10-Year Note. Here’s the daily chart showing basis points:

It remains well above the January highs and today managed to gain enough to rise just above earlier February highs.

The daily price chart for the benchmark iShares U. S. Treasury 20+ Year Bond ETF is here:

That’s 9 closes below the 200-day moving average and it looks as if the 50-day moving average is beginning to trend downward. Price just filled the early December 2023 gap up. There is another gap up on the chart that remains unfilled — it’s the red-circled area in early November 2023.

Here’s the U. S. Oil Fund daily price chart, this is the ETF that reflects the movements of West Texas Intermediate Crude:

It may have regained its footing today with the 1.085 up move. Note how the 50-day moving average is trending upward again. A close above the late November 2023 price of just above $74 might be the beginning of a serious rally. Such a move would have inflationary implications, to be sure.

Not investment advice. For educational purposes only.