The NASDAQ just crossed a key level
Markets rallied on February 22 following more signs of a trade deal between the two biggest economies, the United States and China, and the Fed’s dovish tone at a meeting. The tech-rich NASDAQ Composite (QQQ) rose 0.91% to 7,527.5, while the S&P 500 (SPY) rose 0.64%. The former has risen 14.3% year-to-date, while the latter has risen 12.3%.
The NASDAQ Composite breached a key resistance level with decent volumes, suggesting its rally could continue. The index has risen for the last nine weeks and just crossed its simple 200-day moving average, another bullish sign.
Markets may rise, but not for long
Market risks, including global slowdown, high valuation, slowing earnings growth, and geopolitical tensions, are still hovering. The recent rally was prompted by multiple expansions as investor sentiment improved.
The Chicago Board Options Exchange Volatility Index (VXX) is now at its lowest since early October, at 13.5, suggesting markets are slightly complacent. While the rally may have legs in the short term, it may not be sustainable for the year.