"Yesterday you reported - short position opened Nasdaq 100. I wonder if you are prepared to elaborate on why NASDAQ and not Dow or S&P?"
Eoin Treacy's view Thank you for this question which may be of interest to other subscribers. Technology
has been one of the best performing sectors over the last few months, benefitting
from the weakness of the US Dollar and demand growth from the expansion of the
global middle class. As a result, the Nasdaq
is somewhat overextended relative to the 200-day MA and I suspect more susceptible
to a reversion than either the Dow or S&P. Something akin to a catch-up
move is underway for some lagging large cap markets making short positions a
An inverse correlation has been evident between the weakness of the US Dollar and so called 'risk assets'. With Tuesday's upward dynamic for the US Dollar, I was betting, in shorting the Nasdaq, that the Dollar would follow through to the upside and initiate a more substantial profit taking in the stock market. As it stands, this view is looking perhaps a bit premature but I am willing to hold if for a while longer.