Friday, the 28th of October, shows a swing low for the real rate and a swing high for the NAS100 (black dashed vertical). Since then, the real rate has appreciated and the NAS100 has declined (blue squares). Given yesterday's hawkishness, it is worth keeping an eye on the real yield: NAS100 relationship.
Tech earnings have disappointed over the Q3 earnings seasons, and with the prospect of higher rates, the present value of the NAS100 will likely come under further pressure. As a result, the NAS100 has fallen back into its bearish area between the lower blue and red bands. The longer it stays in this channel, the greater the probability of lower index prices ahead.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.