Nasdaq 100 - Progressing into the 2nd stage of the bear market
Our last post on the Nasdaq index outlined our bearish stance on the general stock market. Today will be no different, and we will reiterate our grim opinions and provide more thoughts on the latest developments in the market.
Since our last article, the Nasdaq index continued to drift lower; meanwhile, QQQ reached our price target of 280 USD and halted its decline slightly above the 270 USD price tag. Furthermore, since November 2021, the Nasdaq index has lost more than 33%, plunging deep into the bear market territory.
Unfortunately, we do not see any reversal of the primary trend on the horizon. Contrarily, we think the FED will follow its path of demand destruction, negatively affecting the stock market and the real economy. Indeed, we would argue that the bear market is already transitioning from the 1st stage into the 2nd stage.
The 2nd stage of the bear market is characterized by the decline of corporate profits and economic projections, which is currently under progress. Therefore, we voice a strong word of caution to market participants over the medium and long term. We believe the market will continue to weaken and constitute new lows over time.
Regarding the short-term, major stock market indices are currently hovering near their 2022 lows. Therefore, we are looking for signs of a short-lived bounce. We reason that soon, we will start seeing market participants forecasting double bottom formations, which will once again lure weak hands into the market - ones that will later reinforce the selling pressure.
Despite that, we commit to our bearish stance over the medium and long term. Accordingly, we maintain 11 000 USD price target for NQ1!; as for the QQQ, we currently choose not to set any price target.
Illustration 1.01
Illustration 1.01 shows the daily chart of NQ1!. Yellow arrows indicate recent technical developments. Additionally, two simple moving averages reflect the presence of a downtrend.
Technical analysis - daily time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the daily time frame is bearish.
Illustration 1.02
The image above displays support and resistance levels for NQ1!.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame is bearish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Since our last article, the Nasdaq index continued to drift lower; meanwhile, QQQ reached our price target of 280 USD and halted its decline slightly above the 270 USD price tag. Furthermore, since November 2021, the Nasdaq index has lost more than 33%, plunging deep into the bear market territory.
Unfortunately, we do not see any reversal of the primary trend on the horizon. Contrarily, we think the FED will follow its path of demand destruction, negatively affecting the stock market and the real economy. Indeed, we would argue that the bear market is already transitioning from the 1st stage into the 2nd stage.
The 2nd stage of the bear market is characterized by the decline of corporate profits and economic projections, which is currently under progress. Therefore, we voice a strong word of caution to market participants over the medium and long term. We believe the market will continue to weaken and constitute new lows over time.
Regarding the short-term, major stock market indices are currently hovering near their 2022 lows. Therefore, we are looking for signs of a short-lived bounce. We reason that soon, we will start seeing market participants forecasting double bottom formations, which will once again lure weak hands into the market - ones that will later reinforce the selling pressure.
Despite that, we commit to our bearish stance over the medium and long term. Accordingly, we maintain 11 000 USD price target for NQ1!; as for the QQQ, we currently choose not to set any price target.
Illustration 1.01
Technical analysis - daily time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the daily time frame is bearish.
Illustration 1.02
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame is bearish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
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