On Friday, Nasdaq exited the bear market that it entered in December. In December, the index fell to a low of $5817. This happened at a time when investors were increasingly worried about Fed rate hikes and the slowing down of the global economy. It also happened at a time when the fears of a recession were increasing. Traders were also worried about the trade war.
Things changed when the US announced that it was restarting talks with China. The talks, which started in January revolve around trade. The deadline for the talks will be in March 1. If the two countries fail to make a deal, the US will move ahead with the tariffs it had announced a year ago. Already, there are signs that the two countries are way apart on the issue.
The biggest market-moving issue was on the Fed interest rates. In December, the Fed announced that it was planning to increase rates this year. This changed in January, when the Fed announced that it was considering patience. By patience, the Fed may mean that it will end its hawkish views. This was probably the main reason why the index soared high.
Another catalyst for the index was the earnings season. Investors considered the earnings to be a bit satisfactory because most companies beat on the numbers.
As a result of all this, the index has continued moving up this year. In total, it has gained by more than 20%. As of this writing, the index has moved to a high of $7073. On the yearly chart, the price is above the 14-day and 21-day EMA while the RSI has moved closer to the overbought level of 70. There is a likelihood that the index will continue moving up, although this could change depending on how the talks between the US and China go.