Category: Nasdaq

It has been observed that structural changes in the NASDAQ 100 between November 10, 2021 and December 27, 2021 have similar characteristics to what occurred over a longer time frame in the NASDAQ 100 between July 10, 2023 and November 10, 2023. Underlying data indicates significant short selling occurred in the first half of November 2023, just as it did during the last half of December 2021. Technical indicators such as the CCI, Chalkin oscillator, and 15 day Stochastic are also in alignment between December 2021 and November 2023.

On November 4, 2023 it was noted that on October 31, 2023 the VIX was in a position similar to where it was on October 30, 2018 and markets would move higher until November 8, 2023. As of November 10, 2023 the VIX continues to move lower with a close of 14.17. Stock markets are expected to move sideways during the week of November 13, 2023 while Congress struggles with the passage of a Government funding bill before November 17, 2023. Additional data will be needed to confirm markets move lower, just as they in in January 2022.

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While Wall Street traders vacation in the Hampton’s and Federal Reserve members confirm their reservations for the August 24 – 26 Jackson Hole Economic Symposium, markets continue to move higher. The following chart illustrates the formation of a pennant in the NASDAQ 100 index.

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A change of direction is near. The chart below illustrates that when the indicator moves above or below the red line, a change of direction occurs.

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At 2:58 p.m. today, the NASDAQ 100 hit 14,724.44 on a retracement level of 67.73%, as discussed on June 2, 2023.

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As of June 7, 2023 the NASDAQ 100 structure is tracking with the NASDAQ 100 May 19, 2008 Fibonacci 61.8% retracement structure shown below. Using this model provides the expectation of another move above the 61.8% level before making a move to lower levels. Looking back to news events on May 19, 2008, there are some similarities in the standard reasons they use to describe market moves.

Weekly Stock Market Commentary 5 19 2008

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On May 30, 2023 it was noted that the NASDAQ 100 structure is in the process of completing a 61.8% retracement pattern that is similar to what occurred in the Dow between August 25, 1987 and October 2, 1987. In addition to this the following charts from 2008 and 2023 provide some perspective on this move. Fibonacci is a guide. Detail calculations show the NASDAQ 100 conducted a 67.73% retracement from March 17, 2008 to June 5, 2008 before it started to decline. Today, a 67.73% move up from October 13, 2022 would provide a peak of 14,724.44 before a decline starts.

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As the Dow and S&P500 approach their structural peaks, the Nasdaq is also included in this group and is expected to fill a gap created in the 1-hour futures chart between August 19, 2022 and August 21, 2022 with a move above 13,247. Algorithms programmed with key words may trigger a sharp move upward and provide the means to fill gaps in the S&P500 and Nasdaq during, or after, Jerome Powell’s speech at 12:40 p.m. EST on Tuesday, February 7, 2023. This would align with a move of 8.5 trading days (+/- 1.5 trading days) after January 30, 2023 noted on February 1, 2023.

Stock chart courtesy of StockCharts.com.

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On January 19, 2023 it was observed that trading patterns in the Dow were similar within specific time frames from April 2022 and January 2023. A review of Nasdaq trades on January 20, 2023 revealed a retracement structure over the last three trading days is similar to five trading days between March 29, 2022 and April 4, 2022. The peak on March 29, 2022 occurred prior to the start of its decline going into April 2022.

Stock chart courtesy of StockCharts.com.

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