NASDAQ: Long term trend and 2 key levels of support
So the NASDAQ went back inside it's long term uptrend logarithmic channel, and had a reaction close to the 50% line at the 271$ level. Few weeks later it is now testing the top of the channel as resistance. It could breakout again, but I believe it will either retest the middle of this channel to create some kind of W bottom, or go down to the bottom of it which coincides with the pre-covid wick high level (236$) before either resuming this long term uptrend or crashing down great depression style which I highly doubt is going to happen.
If the QQQ loses this 236$ level, then it could go down to 168$ (covid lows) or as low as 100$ (pre dot com bubble high), which doesn't seem very likely to me considering the amount of liquidity waiting on the sidelines, and how important technology is in our daily lives. Not only that, but the M2 supply is much larger than it was in 2000, so going back to these prices would mean very very low PE ratios.
So for now I am neutral because we are at resistance, but I do not think the technology bullrun is over just yet. I think this is just a big correction which was needed to move higher.
The monthly RSI went under the 50% line for the first time since 09 which is concerning, but I don't think I've ever seen the yellow and purple line so far apart before on the monthly.
If the QQQ loses this 236$ level, then it could go down to 168$ (covid lows) or as low as 100$ (pre dot com bubble high), which doesn't seem very likely to me considering the amount of liquidity waiting on the sidelines, and how important technology is in our daily lives. Not only that, but the M2 supply is much larger than it was in 2000, so going back to these prices would mean very very low PE ratios.
So for now I am neutral because we are at resistance, but I do not think the technology bullrun is over just yet. I think this is just a big correction which was needed to move higher.
The monthly RSI went under the 50% line for the first time since 09 which is concerning, but I don't think I've ever seen the yellow and purple line so far apart before on the monthly.