A quick look at the Nasdaq 100

The Nasdaq 100 has been the hard charging leader of the market since March. Well, that is true, until last week. We all know by now that a pullback started then and have felt the pain in our accounts since. The drop that the bearish crowd has been calling for over the past 9 years began. Will the perma-bears finally get their day in the sun?

A quick look at the chart of the Nasdaq 100 ETF, $QQQ suggests that a strong end to the week, like the pre-market action is show, could put an end to this rout. The QQQ ended Thursday below the 200 day SMA. A good reset point. This was the first time it had done this since July 2016. Before Trump. Can you even remember anything in the market before Trump?

The ETF also pulled back to rising trend support that has been in place since it started higher out of a early 2017 consolidation. The momentum indicators have also reset lower. The RSI is well into oversold territory and the MACD at the March 2018 extreme low. There has been heavy volume on this move lower as well. With the last 2 days posting the highest volume in 7 years.

Is this capitulation or just the start of a full blown melt down? No one knows for sure. But if the markets bounce Friday or very soon, no one should be surprised either.

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