To start the trading year I’m reviewing Fibonacci retracement levels of the NASDAQ 100 and the underlying Magnificent Seven.
Starting with a 4-year QQQ weekly chart.
The low was set in March 2020, and the high during the final trading week of 2023.
On the news of rate cuts in 2024 the QQQ had a tremendous run beginning in late October 2023. The 200-day simple moving average provided strong support.
The basic question for the beginning of 2024 is do we pullback? Do we continue higher? Or do we linger sideways due to the push and pull of bears and bulls?
The key fundamental narratives I’ll be monitoring are:
- Inflation (PCE) continues to slow
- Interest Rate Cuts on Horizon: Q1 first rate cut, Q2 two more cut)
- Remain on track for Soft Landing
- Promise of AI continuing to excite investors
- Performance of the Magnificent Seven
At All Time Highs: AAPL, MSFT, NVDA
Between All Time High & 38.2% GOOGL, META
At 38.2% AMZN, TSLA
Given the strong push behind the Magnificent Seven over the past few months, what will be the catalyst to push them to even higher highs in 2024? Will the prospect of interest rate cuts be enough? Will new AI or cost cutting (“year of efficiency”) narratives be enough?