Here we go again!
To the Nasdaq's advantage at the moment, RSI is "only" at 56 (70 is overbought) and MACD is not even neutral so there's TECHNICALLY plenty of room to run for the Nasdaq - though that will make it all the more tragic if we fail again at 30K. I would say 400 points is a lot to cover but it's not anymore, is it? In fact, it's only 1.4% these days.
The real drama is the now-declining 50-day moving average, which has curved down for the first time since Feb, when the Nasdaq gave up 3,000 points (11.5%) in 2 months - so we'll be adding hedges as soon as/IF the 50 dma does fail! To pull that line out of a tailspin, we need to close above it for a few consecutive days so watch 29,357 as a key point of potential failure into the weekend.
See how easy TA is? But, of course, that's not TA - it's MATH! We're talking about the math that CAUSES the chart to generate a shape - NOT the "tail wagging the dog" that is generally TA analysis. If you want to know how a chart will look in the future - DO THE MATH NOW!
Notice the entire recent bounce was built on 4 strong days which were "window-dressing" at the end of July and Big Bank and Mag 7 earnings and, since then, the volume is trailing off and we are drifting - this is not the kind of conviction strength we need to break back over 30,000, is it?
Oh dear - that does look foreboding, doesn't it? Well, the VIX is 15.54 so they're not worried so why should we be? Actually, we shouldn't be - we're mainly in cash and heavily hedged so, if the market does drop - it's simply time for us to go shopping but that doesn't mean our portfolios won't take a hit and no one LIKES taking a hit - even if it does provide us with buying opportunities.
