NASDAQ, Trading Above All-Time-High But Volatiltiy Gets Lower!

Hello Traders Investors And Community, welcome to this analysis where we are looking at recent events, the current price-structure-formation, and what we can examine from the major index NASDAQ. As the major market provided a steady recovery since the corona-breakdowns seen this year in March we are facing a slightly overbought condition at the moment which can turn to a higher pull-back when supply enters the market as there is still not a solid confirmation for further growth in the other major indices like the S&P or RUSSELL. Today's employment rates release will provide fundamentally important information which can affect the market in a bullish or bearish condition as the employment rates showed the highest set back for 20-years and the dotcom bubble in march where the corona hit many world economies and global financial markets, now it will be an important time where the market data has to show and possibly adjust if the market is backed of healthy real economy conditions or if the rally showed was just speculative and a bigger pull-back will follow.

On the technical side of things we have the NASDAQ just clearly taken out the all-time-high as the first major index in this rally which can signal an overall strength of the NASDAQ in comparison to the other markets but the big question is now if this was just a huge bull-trap like it was seen to many times in the past when considering the fact that the volatility gets lower and lower as you can see it marked in my chart with the red low volatility-circle this consideration is not far away. Furthermore, we have the possible rising triangle formation which is marked with the blue narrower getting lines in my chart. The upper boundary of this triangle building up a coherent bearish resistance cluster when taking the wave E of the overall wave count into contemplation. Adding all these heavy weighted factors together NASDAQ is showing a more bearish than bullish environment currently with a possible reversal to the downside incoming when the rising triangle confirms properly which will happen when the lower boundary confirms with a volatile move to the downside as you can see it marked in my chart.

The incoming possible smaller or bigger pullback is backed by the fact that the real economy and stock markets showing a huge divergence in growth, where the real economy is still damaged from the corona measures and breakdowns in employment rate and company insolvencies the stock market rally shown up was not backed by a solid groundstone which can establish more prosperity to come in a confirmed healthy market environment, to establish such an environment it is important that the stock market and real economy move together in the same direction otherwise the rally in the stock market will be a speculative one and not backed by a strong and well-esteemed domain. When this pullback happens as mentioned which is by the way possible in the rest market also we need to look and elevate if a stabilization can happen where the real economy also backs up or there is more downside to come especially in the ongoing volatile world we live in today, it will definitely be interesting how this situation develops further and as market participants, we should always look in both direction to wage possibilities and opportunities in the best possible manner.

In this manner, thank you for watching, support for more market insight, have a great day and all the best to you!
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Information provided is only educational and should not be used to take action in the markets.