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Tom DeMark Sees Signs of Exhaustion in NASDAQ 100 as Treasury General Account Nears Depletion

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A discussion on the current state of the NASDAQ 100 and the Treasury General Account, with insights from Tom DeMark.

description: an anonymous image depicting a graph of the nasdaq 100 index, with a downward-sloping trendline and a red arrow pointing downwards. the graph is overlaid with technical indicators, including moving averages and oscillators. the image conveys a sense of caution and concern about the current state of the market.

Tom DeMark, a renowned technical analyst and founder of DeMark Analytics, has recently expressed his concerns about the NASDAQ 100 index. According to DeMark, the index is showing signs of exhaustion, which could mean that a correction is imminent.

DeMark's analysis is based on a proprietary set of technical indicators that he has developed over the years. These indicators are designed to identify turning points in the market and provide early warning signals to traders and investors.

The NASDAQ 100 index, which is composed of the 100 largest non-financial companies listed on the NASDAQ stock exchange, has been on a tear for the past year. The index has surged by more than 40% since the start of 2020, driven by the pandemic-induced shift to remote work and online shopping.

However, DeMark believes that the current rally may be unsustainable, as the index has reached an overbought condition and is due for a pullback. He notes that the NASDAQ 100 has failed to make a new high in the past few weeks, despite the broader market reaching new records.

DeMark's warning comes at a time when the Treasury General Account is also nearing depletion. The Treasury General Account is a checking account that the government uses to pay its bills and fund its operations. The account balance has been declining rapidly in recent months, as the government has been drawing down its cash reserves to fund stimulus programs and other expenses.

The depletion of the Treasury General Account could have significant implications for the financial markets and the economy as a whole. If the account balance falls to zero, the government may be forced to suspend certain payments or issue emergency debt to cover its obligations.

The stock prices of four large-cap U.S. companies have doubled so far this year, marking mind-boggling performances for such a short period. These companies are Tesla, Moderna, Square, and Etsy, all of which have benefited from the pandemic-induced changes in consumer behavior.

Shares of the fifth-largest exchange-traded fund in the world, the Invesco QQQ Trust (NASDAQ:QQQ), climbed up to a new 52-week trading high during Friday morning's trading. The QQQ is an ETF that tracks the performance of the NASDAQ 100 index and is widely used by investors to gain exposure to the tech sector.

After enduring the fourth-worst year in its history, the NASDAQ 100 index is roaring back to life. The tech-heavy index has outperformed the broader market in 2021, driven by strong earnings growth and investor optimism about the sector's long-term prospects.

Despite the recent gains, some analysts remain cautious about the outlook for the NASDAQ 100 and the broader tech sector. They point to concerns about rising inflation, higher interest rates, and regulatory risks as potential headwinds for the industry.

From 2009 to 2021, we experienced one of the most powerful bull markets in modern history. This is especially true for Nasdaq (NASDAQ:QQQ), which has been one of the best-performing indexes during this period.

Widespread layoffs are being applauded by market prices. Click here to read my thoughts on what efficiency gains could mean for QQQ ETF. The Invesco QQQ Trust (NASDAQ:QQQ) ETF has advanced more than 24% so far in 2023, outperforming the 8% rise in the SP 500.

In terms of trading plans, longer-term traders may be interested in buying QQQ slightly over 325.26, with no specific target and a stop loss at 324.32. The technical summary data suggests that the index is in a bullish trend, with support at 315.29 and resistance at 336.68.

Overall, the NASDAQ 100 and the QQQ ETF continue to be popular choices for tech investors and traders. However, with concerns about exhaustion and depletion looming, it may be wise to exercise caution and stay vigilant in the months ahead.

tom demarknasdaq 100exhaustiontreasury general accountoverboughtpullbackstock priceslarge-cap companiesetfinvesco qqq trusttech sectorearnings growthinflationinterest ratesregulatory riskslayoffsmarket pricesefficiency gainstrading plansbullish trendsupportresistanceNASDAQ:QQQ
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