When bond prices trough, tech stocks rally

When tech stocks rallied, bond yields were falling (mainly towards zero). That meant bond prices were rising.

Inversely, when bond prices are declining (and yields are climbing), tech stocks generally fall………to a point…..when bond prices resemble an oversold extreme.

At that point, we’ve seen the commencement or a continuation of a rally in the Nasdaq 100 index.

This theory worked except in January and March 2022. They were moments when the index was reaching extraordinary heights and I’ll need to look into this a little more.

Currently (soon), I think bond yields will moderate (fall), which means bond prices rise. This suggests the Nasdaq 100 also rises.

I’ll continue to mess around with this idea.

September 8, 2022

by Rob Zdravevski

rob@karriasset.com.au