Technology has certainly been the market leader throughout the past decade, but I believe the most recent six month price action in the Nasdaq has been due to rotation out of emerging markets and into US tech stocks, namely Microsoft and Amazon. The Federal Reserve continues to take liquidity out of the market which is creating significant price volatility. Although the Nasdaq has produced higher highs, these are unconfirmed by bearish divergences in the RSI, as volume is not supporting the upward movement. I believe we are at the top of the sequence and that thinly lined order books, as a result of decreasing liquidity, will contribute to a rather violent correction. I have placed a short term price target on IXIC of 4850 by Q4 2018.
Comment:
Looks like we are seeing Bulkowski's Ending Diagonal forming in the IXIC. We may see a peak around September 10th if this pattern is maintained.