Some thoughts on the continued rally in big tech stocks

OptionProMax
2022-03-31

The recent rebound in U.S. stocks has made many people stunned. Even if I am a trend, I can’t understand such a violent rebound, and I don’t want to talk about a reversal, because I know that the U.S. stock market has only just reached the 20-week line. To talk about the reversal, I think we have to wait and see.

Recently, the yield of 10-year U.S. Treasury bonds has continued to soar, almost in the form of a major uptrend, and the yield of two-year Treasury bonds has risen even more. Both patterns are major uptrends.

For the yield of government bonds and the price of government bonds, the relationship between the two is negatively correlated. As the price of government bonds falls, the yield of government bonds will continue to rise. On the contrary, if the price of government bonds continues to rise, the yield of government bonds will decline.

The following is my personal opinion, not necessarily correct,

At the same time, on the other hand, it can be seen that the US dollar index is constantly strengthening, and it is close to 100. In fact, all signs are showing that a large amount of funds are continuously flowing back to the US dollar. Some people are selling equity assets in emerging markets, some people are selling government bonds, and the weight of US equity is constantly increasing. There is a positive feedback effect between them. The continuous selling of treasury bonds has led to rising yields, and the prices of treasury bonds have fallen further. The heavyweight stocks in the stock market have continued to rise, attracting more funds to sell treasury bonds, including overseas U.S. dollar funds continue to flow back. Moreover, the interest rate hike is obviously more beneficial to the US dollar assets than the emerging Huobi market.

Moreover, the stocks that have risen in this round are all very core large-scale technology stocks, such as typical Apple, which is definitely a continuous inflow of low-risk funds, such as funds that previously held bonds, which are typical low-risk appetites funds. From the perspective of the game, as the core assets of U.S. stocks continue to rise, the prices of 10-year government bonds, etc. have continued to fall. Beware of some funds starting to sell U.S. stocks and return to the bond market. After all, for a stable fund, a 10% return in a month is also very good. For example, Apple has increased by nearly 15% in the last half month. Tesla and Nvidia have nothing to say.

The rebound to the current position may come to an end, or it may continue to rise, because the last time the Nasdaq took this form was during the epidemic in 2020. At that time, it broke through the 20-week line and continued to rise, and I haven’t entered yet. US stocks.

$特斯拉(TSLA)$ $英伟达(NVDA)$ $AMD(AMD)$ 

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Comments

  • henshengqi
    2022-03-31
    henshengqi
    Is the recent rally in the stock market normal? I think we need to be aware that on the eve of hyperinflation, there is often a deflationary situation.I mean, of course, once we hit that point of hyperinflation, our stock market will crash.At that point, the stock market will fall off a cliff from a very high position, and it will be scarier than we realize.So be careful with any investment you make!
  • dong123
    2022-03-31
    dong123
    Yes, your understanding is quite correct.A Fed rate hike would directly benefit the dollar, not virtual currencies
  • ValuInvestor
    2022-03-31
    ValuInvestor
    There appears to be another bull run to go before recession hits if the indicators are correct. According the treasury yield curves, a slowdown is looming on the horizon - exactly when, no one knows
  • 神佛护佑
    2022-03-31
    神佛护佑
    市场经济,不以物喜,不以己悲,平常心看待一切。
  • Dazza7
    2022-04-01
    Dazza7
    Positive outlook but is it just temporary? There is still a war going on and who knows what might happen in the coming months
  • GregoryRichardson
    2022-03-31
    GregoryRichardson
    Tesla has been trending pretty well lately, and I'm glad the giant is back in its normal place
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