(Click on image to enlarge)

(Click on image to enlarge)

Bulls pushed the Nasdaq up another 1.98% this week but the rally is on shaky footing in my opinion.

Most importantly, interest rates continued to surge higher Friday with the 10-year yield adding 15 basis points to 2.49%. As I wrote on Monday, rising interest rates are negative for growth stocks because it decreases the present value of their future earnings by increasing the discount rate. The Nasdaq – home to growth – has been able to shake it off but I don’t believe it can do so indefinitely.

In addition, 14,200 seems to be stiff resistance as you can see in the weekly chart of the Nasdaq above. Also, note the precipitous drop in volume this week compared to last.

I was prepared to reduce my short growth positions today in the event of another rip higher but it didn’t materialize. I’m at the point where I’m ready to throw in the towel (by reducing my short exposure) if we get another pop higher. For today, I didn’t do anything in this respect and will await the market action next week.