Welcome Traders,
Due to ongoing economic events the US stock market underwent a correction for the past 4 weeks. From peak to trough, the NASDAQ made a 14.4% correction and has now found a level of support at 19,125.3. Since then, price has made a series of HHs and HLs showing signs of a relief rally or a "bounce" from support.
However, the question remains...is this a relief rally to ATHs or a relief in a bear market? Meaning, can we anticipate that price will continue bullish to ATHs or is this a short term bullish move to signal LHs on the larger TF before continuing the downtrend to new LLs. If price were to break the previous Lows at 19,125.3 then we may be heading into a bear market and possibly a recession. Note a bear market is defined as a 20.0% ore more correction from ATHs. Since price has only made a 14.4% correction we have not entered into a bear market YET.
Given the current economic conditions and geopolitical tensions, none of us knows whether price will rally to ATHs or continue to make new lows. A great deal of uncertainty persists within the market primarily due to the uncertainty around tarrifs and its effect on companies and consumers. US president Donald Trump has proven to evoke tremendous volatility within the markets, with disregard on how he may be impacting the markets. The market conditions are changing compared to Biden's administration and so its important to adapt and keep abreast with the fundamental outlook prevailing.
As news continues headline I will be paying key attention to price action at 20,320.0 - 20,552.1 as a previous level of resistance on the daily/weekly chart.
1. As long as price respects and remains below this level then it is considered bearish to either restest or break below the previous lows signalling a new daily (HL or LL).
2. However if price is showing strong bullish candle stick pattern with a close above 20,552.1 then the uptrend to new HHs is likely to be created.
Note that the Weekly HL is respecting the 61.8% fib level of retracement which justifies the currently relief rally or bounce from support. Furthermore, this retracement level aligns with a weekly trend-line price has previously respected.
Although NAS100 is primarily a bullish instrument I would advise to be a cautious buyer in thinking that this is the rally to ATHs. Even if price may not break 19,125.3 there is a high chance of consolidation, manipulation and a lack of clear direction in the market.
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t.me/JFrancisForex
- Signals for NAS100 US30 and GOLD
- Full Technical and Fundamental Breakdown of the Market.
t.me/JFrancisForex
- Signals for NAS100 US30 and GOLD
- Full Technical and Fundamental Breakdown of the Market.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Join my FREE trading club to receive everything necessary for earning!
t.me/JFrancisForex
- Signals for NAS100 US30 and GOLD
- Full Technical and Fundamental Breakdown of the Market.
t.me/JFrancisForex
- Signals for NAS100 US30 and GOLD
- Full Technical and Fundamental Breakdown of the Market.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.