The NASDAQ Is In A Precarious Situation, Here Is Why!

Hello Traders Investors And Community,

Welcome to this fundamentally important analysis we are looking at the NASDAQ Index 4-hour timeframe perspectives, the recent events, the current formational structure and what are possible outcomes the next times. A wise trader once said "what rises strongly can also fall strongly" these are some important words compatible to the current situation with the NASDAQ, as many indices the NASDAQ somewhat recovered from its corona-lows seen this year and also made some new highs above the established pre-corona conditions, it was also stronger than the SPX or DOW and made the new highs faster however there are some meaningful signs the NASDAQ had shown now as the volatile movements pushed the price firstly heavily to the downside it is now an important structural allocation as the index is at the pre-corona conditions, the big question now is if this move above the previously established highs was just a big bull-trap which can happen as the bear-market is still not confirmedly over and there rushed many retailers into the market while smart money staying on the sidelines, from a fundamental perspective this pull-back was expected as the gaps between real economy and stock market still existing within the ongoing corona increase we should not be naive and keep the heavy bearish established volatility this year on the desk.

When looking at the chart now, you can watch there that the NASDAQ made these heavy down moves to the point where it is actually now testing the established S/R-level by past price action, this line is marked in red also you can watch there that the line was severely resistance in the past and it has its origins in the established pre-corona highs underlining the importance of this line, currently the NASDAQ is on this level and testin it which can lead to a smaller rally firstly which will be crucial in this structure as it is leading directly into resistance which the index has at the 100-EMA marked in grey and the 60-EMA marked in green, together with the middle line of the channel it is building a resistance cluster here where a consolidation between this cluster and the rising S/R-level can be possible as it is seen in my chart, this consolidation will lead into the final decsision and as the index has more bearish than bullish signals with the heavy resistance and the established bearishness a bearish breakout to the downside is more likely, this will go on till there is remaining strong support found which can possibly reverse the situation, it can be in the FIbonacci-levels marked in orange, when the index does not manages to hold these levels and falls below it this can be critical for bull development overall and the ongoing wave-count where it is not yet confirmed if it is a bullish wave count or a bull trap wave count, the bullish wave count will invalidate when the NASDAQ falls below the 105 level marked in my chart in red!

The NASDAQ currently is a decent example to what the stock market currently trades in and why the next times will be so important for further developments, it has to be noted that fundamentally speaking there is no barrier for new bearishness to the downside as the real economy is not yet fully recovered by the corona increase and it will be not a good sign when the index breaks below the previously established highs as it is showing the weakness of the bulls also on the technical side of things. Besides that the rallies seen the last times were completely pumped up by central bank money and the retail investors rushing into the market which also can rush out of the market again when things increase into a more declined outlook. When taking a bullish rally with new highs and an ongoing bull market apart we need to ask our selves how long this can function as it is just the peak on the ice iceberg which can every time unload and result into a much greater bear market, many people already mentioned the bear breakdowns over with the corona lows established, nevertheless, the problems in the economy are still there and should not be kept by side, this is why we should definitely take the anticipation of new decline within out schedule

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