NASDAQ Monthly View: Are these the scenarios we should expect?
Been a while since i posted a chart reading. so here's a fresh one - with a question at the end... cause honestly, i don't know :)
This is an interesting view of the NASDAQ - using a monthly chart of the NQ1! - showing the market action since the famous 2008 drop - with an attempt to find some sort of a trend or logic to how the market moved along the years.
During the COVID drop back in 2020, the market gave up enough signs that allowed many traders to get out of market before the drop, then come back in at the lows. in contrast, this time, the drop was somehow less expected - quick rise in inflation, new COVID waves with renewed lock downs, supply chain issues , and a strong geopolitical storm and war breaking out - Similar to some other traders, i got caught while i was fully "in the market" this time with a portfolio of mainly tech stocks that started dropping faster than traders could react or hedge. so the wise thing to do is .... you guessed it, hold on to your seat and keep you head low :)
the question i'm trying to "think aloud" about here is, where is the recovery to be expected this time? (How long do i need to "sit on my hands" :) ? )
this view looks at a 12-year history with the 2 major market drops - it shows 3 possible recovery scenarios
- Scenario #1: recovery around the $12,300 level -- that's the post-COVID resistance-turned-support level
- Scenario #2: recovery around the $11,000 level -- that was the first post-COVID support level
and if we breach both these 2 possible support levels, the next (our worst case scenario) is
- Scenario #3: recovery around the $9,700 level -- that's the pre-COVID market high
we're already > 20% drop from the highs - the monthly and weekly views show that in spite of recent signs of a possible recovery, there's still a lot of weakness and volatility to come .. a lot of patience and calm are needed as we still have some bad weather ahead..
i'm curious to learn from the past and see what the charts tell us, and also check in with fellow traders who also got caught in a similar situation.
which scenario do you think may unfold, and why ?
do you see other possible recovery scenarios ?
my guess is, we'll get our answer between August and December .. but it's an interesting exercise.. all ideas are welcome.
please feel free to share your views and comments. and please trade safely.
Edit: Here's the chart without the lower indicator panes for a clearer view
This is an interesting view of the NASDAQ - using a monthly chart of the NQ1! - showing the market action since the famous 2008 drop - with an attempt to find some sort of a trend or logic to how the market moved along the years.
During the COVID drop back in 2020, the market gave up enough signs that allowed many traders to get out of market before the drop, then come back in at the lows. in contrast, this time, the drop was somehow less expected - quick rise in inflation, new COVID waves with renewed lock downs, supply chain issues , and a strong geopolitical storm and war breaking out - Similar to some other traders, i got caught while i was fully "in the market" this time with a portfolio of mainly tech stocks that started dropping faster than traders could react or hedge. so the wise thing to do is .... you guessed it, hold on to your seat and keep you head low :)
the question i'm trying to "think aloud" about here is, where is the recovery to be expected this time? (How long do i need to "sit on my hands" :) ? )
this view looks at a 12-year history with the 2 major market drops - it shows 3 possible recovery scenarios
- Scenario #1: recovery around the $12,300 level -- that's the post-COVID resistance-turned-support level
- Scenario #2: recovery around the $11,000 level -- that was the first post-COVID support level
and if we breach both these 2 possible support levels, the next (our worst case scenario) is
- Scenario #3: recovery around the $9,700 level -- that's the pre-COVID market high
we're already > 20% drop from the highs - the monthly and weekly views show that in spite of recent signs of a possible recovery, there's still a lot of weakness and volatility to come .. a lot of patience and calm are needed as we still have some bad weather ahead..
i'm curious to learn from the past and see what the charts tell us, and also check in with fellow traders who also got caught in a similar situation.
which scenario do you think may unfold, and why ?
do you see other possible recovery scenarios ?
my guess is, we'll get our answer between August and December .. but it's an interesting exercise.. all ideas are welcome.
please feel free to share your views and comments. and please trade safely.
Edit: Here's the chart without the lower indicator panes for a clearer view
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