2022/05/15 (046) Technical Analysis – NDX

Deviation From The Normal Type Through Structual Change
Is Manifested In The NDX In The Form Of A Normal Distribution Curve
US Economy, US Fical Policy, And/Or Monetary Policy No Promise To Be Bullish!


The NASDAQ 100 Index Is Already Down Almost 30% For The Year To Date In 2022.
And An End Of The Massacre, The Bloodbath, Is Currently Not In Sight! Why Should It Be One?

Of course, the price declines have a good reason. And that’s mostly because the US Federal Reserve (Fed) is on track to raise interest rates multiple times in 2022 and 2023. Which makes safe interest-bearing securities, such as the US yield curve, more attractive in a risk-reward ratio. So that in such central bank scenarios, stocks, especially higher-valued technology stocks, are generally perceived as too expensive. And yields are rising.

However, the interest rate hike by the FED is an effect and not a cause! Not that we misunderstand each other. Because the FED’s consistent interest rate hike is a reaction to escalating US inflation. And that, in turn, is the consequence of the failed, blind, incompetent US economic policy of Joe Biden. Who, the more I think about it, counteracted the previous successful US economic policy of his predecessor Donald Trump. Which is why today, here and now, we have a US economy, a mood in society that is primarily due to the fiscal policy decisions of the US Democrats and their green energy policy. Which manifests itself most badly on the NASDAQ 100. And due to the homemade combination of weaker fundamental prospects, precisely due to the current fiscal and monetary policy environment, and a chart technique that is still not enlightening, I see myself forced to formulate an NDX short trading capability again. Because as more I`m thinking about it in an unemotionally rational way, it instinctively seems more and more obvious to me that the general market weakness, and the fact that the old all-time highs may not be reached again for a long time, is a favorite maneuver of most traders and or but also investors, in the NASDAQ 100 Index, at least for this summer of 2022! Although up until now I still secretly didn’t want it to be (un)extremely true, instinctively, emotionally, rationally.


Elections Have Consequences! And Monetary Policy Decisions By The FED, On The Financial MarketLet alone fiscal policy decisions in the US House, in the US Senate, on the economy – all taxpayers and/or consumers. So that we have to be patient until the Midtern election in the USA, my NASDAQ 100 index bulls! Even if it is more than difficult to put it in writing. But as already briefly mentioned, the consistent restrictive monetary policy of the FED, due to the expansive fiscal policy, of the US Democrats under Joe Biden’s watch, I will not and cannot ignore. Since interest rates like those of 10-year TIPS have already risen drastically in 2022, causing the NASDAQ 100 price-to-earnings ratio to fall. And thus the value of the NASDAQ 100 Index also fell. That’s because rising interest rates affect the NASDAQ 100’s earnings yield. And that`s why the us yield curve is the reciprocal of the price-to-earnings ratio – i.e. the higher the earnings yield increases, the lower the price-to-earnings ratio becomes.

However, in addition to the US yield curve, which has become more expensive, the earnings estimates for the NASDAQ 100 have also fallen drastically since the beginning of 2022. In January 2022, NASDAQ 100 earnings forecasts increased to nearly $571 per share. Since then, estimates have fallen to $560, down about 2%. Overall, that’s not much, but when P/E multiples fall, a drop in earnings estimates can cause a lower valuation. So that more and more investors and traders are saying why buy now, it will be cheaper in the near future anyway. Which, of course, always reinforces a bear trend, as a rule, textbook-like. Until it comes to the final sale. Which we, in the historical context, have still not been able to perceive! If I am not wrong?

Basically Only At Over 14.073 Points Back Again I`m Initially Neutral For The NDX
Basically And/Or Only At Over 15.265 Points Back Again I`m Initially Bullish For The NDX

Because the biggest problem for the NASDAQ 100 and its further development will be how much interest rates will rise and whether earnings estimates will be corrected further downwards. The US Yield Curve is a super elegant and noble comparison curve for this.