📈NASDAQ DECISION TIME....SOON

The Nasdaq has a decision to make. Over the course of the year we have seen two major rallies that have lifted the index between 15-20%. As time moved on so did the Nasdaq major uptrend. We first broke the 10 month simple moving average(SMA) in the first quarter of the year on the Monthly chart. Since then we have been unable to rally above it even once. There are only two other times in the past 30 years the Nasdaq has been below this level for this period of time. These are 2001 dot com bust and the great financial crisis. The 50 day simple moving average in red has not been breached since 2008. The Index needs to hold here. This is decision time. Do we break a technical level not even breached during the pandemic? We have PPI on Wednesday and CPI Thursday. Both can move the market wildly. The answer is no one knows but there are signs to look for.

When you look at the Nasdaq over the past three years you can see massive swings. This is the first time we are below the 200 week moving average since 2008. More concerning is the lack of movement in the MACD histogram. If you look at the pandemic level you will notice that the histogram is significantly deeper in the red than now. This is called a negative divergence and its bearish.

Nasdaq daily chart is clearly showing signs of fatigue. $269 was our major support and was not breached since peak inflation. Now it has become resistance ahead of critical economic data released this week.

THE SP500 relative to the NASDAQ is a great indicator to the trajectory of the index. We broke a downward trend established in 2007. This lets us know that the SP500 will outperform for now. The only situation this usually happens is when both indexes are dropping.

SPY relative to the NASDAQ 2020-present. Zoom in and you can see a classic break out.

Obviously no one knows what the future holds but by looking at the above data gives us some insight as to what can happen. For daily stock ideas make sure you follow us on Youtube. Below is the latest video. Pay close attention to what is said about the $VIX.

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