This is a very long-term view and, of course, anything can happen if you are trying to predict 2-3 years move. As you know, in trading is best to trade what you see, not what you think, and what I see now is looking like Nasdaq is forming a measured move and as crazy as it may sound in the current economical conditions, the target for this pattern is well above 20k. (The Measured Move is a three-part formation that begins as a reversal pattern and resumes as a continuation pattern.)
So, the Nasdaq index has started the year badly and has dropped from above 16k to a low around 11k, but looking at the longer TF we can see that this drop can be just a correction of the last leg up that begins at the start of the pandemics. Also, the index reversed from between 50% and 61% Fibo and important horizontal support.
At this moment Nas100 is flirting with the falling trend line and a break here looks imminent. A break and sustained buying above this level could lead to further gains and, as I said, the target for the pattern is above 20k
You may be right, but my amateur eye sees such a situation.
Mihai_Iacob
⋅
@trader-123456, i m not bullish in the current situation, that s why i m puzzeled...
trader-123456
⋅
I know that you have a lot of experience, I am only an amateur, but I have a feeling that the coming period will not be good.
Mihai_Iacob
⋅
@trader-123456, me too. I m really confused, fundamentals say big drop, chart on the other hand. I m not in a trade and anyways I don t trade such a long term. We ll see, it would be funny though to pass 20k with this economicals
jdgpro
⋅
@Mihai_Iacob, The reality is inflation needs to be lower than interest rates, or inflation will stay high. The FED will not raise interest rates high enough to fix inflation, because if they do that, the federal government would need to cut the federal budget drastically to service national debt. We face a future of higher rates, but higher inflation. Higher inflation has historically correlated with lower stock market returns. If they raise rates to 8%, the interest on the debt balloons from $562 billion in 2021 to well over a trillion dollars. The US federal budget is $5.9 trillion with a $2.1 trillion deficit. IF we double interest on the debt, the deficit spirals out of control, or we need to cut spending 10% at least just to stay even, which will throw the economy into deep recession. We are screwed, but the stock market is doomed for a severe hair cut no matter what happens. The case for a huge rally on top of the last 10 year rally is not watching macro fundamentals. I think the possibility of reversion to the mean is good via a deep recession in the next year or two.
@matejkocvara1, yeah, my idea makes me laugh too in this ecomomil evirement. But this is what the chart is saying if we pass 13500
Solldy
⋅
Great view of the situation with a good description! From a professional point of view, it would be interesting to know in what order, what steps you use when analyzing an asset)