The US stock market recovery has been led by the surging Nasdaq. The tech-dominated index has consistently generated strong returns, and for the year to date the Nasdaq has grown 8.2%. This has been led by strong performance from the top 6 Nasdaq stocks including Google (GOOG), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), Gilead Sciences (GILD) and Facebook (FB) among others. Based on market capitalization, these tech stocks completely rule the index by their weighting alone. Consider for a moment the year-to-date performance of each of these leading technology stocks:

• Google (GOOG: NASDAQ)                                                                    +19.92%
• Apple Inc (AAPL: NASDAQ)                                                                 +3.35%
• Amazon (AMZN: NASDAQ)                                                                  +72.33%
• Netflix Inc (NFLX: NASDAQ)                                                                +141%
• Gilead Sciences (GILD: NASDAQ)                                                        +26.62%
• Facebook Inc (FB: NASDAQ)                                                                 +20.07%

These figures are certainly impressive, and the market capitalization of each of these companies is the reason why they are weighted so heavily in the index. Compared to the S&P 500 index, the Nasdaq must look like the road to El Dorado. For 2015, the S&P 500 index has had a rather lackluster performance. For the year-to-date the S&P 500 index has gained 2.18%, compared to 11.39% in 2014, 29.6% in 2013 and 13.41% in 2012. The current year's performance points to troubling times ahead, given ongoing commodity price weakness, a likely US interest-rate hike of up to 0.25% in September, depreciating emerging market currencies, a further weakening of the euro with quantitative easing policies across Europe, collapsing equity markets in China and ongoing geopolitical uncertainty in the Middle East.

Will the NASDAQ Bubble Burst?

I would have to say that if the bubble doesn't burst, it will certainly deflate as price corrections come to pass. The markets are dominated by sentiment, not substance. As news of interest-rate hikes continues to percolate, investors will be more likely to plough their funds into other interest-bearing investments such as Treasury notes, fixed savings accounts et al. This will eventually impact on the Nasdaq since the bottom line for any company is determined by how much profit it generates and how much of a dividend it pays out. With increasing costs of borrowed capital in the form of long-term loans, debt repayments and the like, the performance of the aforementioned technology companies will decline. A strong dollar hurts foreign markets since more local currency is required to purchase dollar-denominated products. With commodity prices plunging, massive layoffs and revenue declines are taking place. This naturally impacts on the personal disposable incomes of the populace. The interconnected nature of global markets is testament to the fact that weakness in one sector of the economy invariably affects the strength of other sectors.

How to Make Money from the Market  

Binary options traders can profit from the volatility in the S&P 500 index and the Nasdaq by following market activity. For example on Friday this week at 8:30 AM the US employment report will be released, this will be followed by the consumer sentiment report at 3 PM. If US employment figures exceed or meet expectations, market sentiment will improve. It's much the same for consumer sentiment. It should be remembered that there is an inverse relationship between the S&P 500 index and the US dollar. Since the US dollar index is at a ten-year high, the S&P 500 index should be weaker. This trend is likely to continue with strong US fundamentals and a likely interest rate hike. I would definitely be hedging my bets with put options for the S&P 500 index over the short-term (the rest of 2015).