US NASDAQ 100 Index

The NASDAQ bounced well overnight and ended the day down just 1.2%, with several of the “Magnificent Seven” closing higher, including Microsoft, Meta, and Netflix. However, U.S. memory stocks were under the pump, tracking sharp declines in South Korean chipmakers, while Blackstone fell 3.8% after the Financial Times reported $1.7bn in net outflows from one of its private credit funds in the first quarter. There was little place to hide, with gold reversing Monday’s gains and trading sharply lower, as the CBOE Volatility Index, Wall Street’s fear gauge, climbed to its highest level since November.

The oil price and knock-on inflationary fears are driving intraday swings in stocks, but we feel they are looking for “excuses” to bounce with the NASDAQ still ~6% below its all-time high, far from panic stuff. Forecasting the path of the Iranian conflict is clearly guesswork, but we do feel that when a resolution is found, stocks will trade higher, making the “main game” where and how to start increasing risk.

If we stand back and ignore the news, the NASDAQ is simply consolidating its strong gains from last April’s low, usually a bullish sign before another leg higher.

• We believe the market is looking for a low, and we can see ourselves turning bullish in the coming days/months.