Watch these levels to know if Nasdaq-100 is set to break out
(See the video above for Todd’s complete chart breakdown.) Let’s get this out of the way. Yes, I’m wearing the stereotypical finance bro vest. Yes, my wife told me it’s cringe, and yes, I’m aware that the vest is the official uniform of the finance bro who’s about to tell you exactly where the market is headed. I’m not that guy. This finance bro is confident about one thing, and that’s that we’re in a very uncertain market. Geopolitics, domestic political shift following the midterms, a CEO scandal with the market’s most important stock, AI doubts, sticky inflation. Pick your headline. The approach here, I think, is not predicting how it all shakes out. It’s being content not knowing, having the confidence to say so, while staying diligent about watching the relationships and levels that matter. Strip out the noise, and the Nasdaq-100 has been doing something pretty boring, actually: chopping in a range since May, roughly 27,200 to 31,000. October’s push above the top failed. Last week’s flush dipped under the floor and got bought right back up. As long as 27,200 holds, the range is intact. Lose it on a closing basis, and we’re having a different conversation. So why can’t tech break out? Look under the hood of the 10-year Treasury yield sitting around 5%. Inflation expectations (the orange line) are falling. The bond market is basically saying that the Fed wins the long-term inflation fight. What’s doing the heavy lifting is real yields at 2.79% and near their highest since 2008. Real yields are the discount rate for growth stocks, and when they’re this high, paying up for future earnings gets a lot harder. That’s the headwind, especially for the growth stocks (i.e., semis) that we’ll cover next. Now here’s where it gets interesting. Look at everything the semis have been dealing with including geopolitical concerns, inflationary pressures outside of energy following that CPI report, domestic political shifts, scandals and Nvidia — which reports earnings next week. Through all that, semiconductors just finished a 32% pullback relative to the S & P 500 . That’s almost a carbon copy of the 29% relative drop from mid-2024 into spring of 2025. Last time, that drop marked the low right before a massive run. Does history repeat? I honestly don’t know. Remember, I’m not the finance bro in the vest trying to convince you he knows everything. But the setup looks decent. A move back above 0.72 on the SMH/SPY ratio would tell me the leadership is returning to the semis. Until then, keep your head in the game, your eyes wide open, and I’ll continue to listen to my wife for dress recommendations on CNBC. Kidding aside, watch the full video for the full explanation of the dynamics at work driving the charts and levels that will spring us into action. Todd Gordon is the founder of Inside Edge Capital, LLC . DISCLOSURES: Gordon owns NVDA personally and for clients of his wealth management company Inside Edge Capital, LLC. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
