Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Chart Of The Day: Nasdaq Bears Eye Summer Lows

By Fawad RazaqzadaStock MarketsSep 23, 2022 07:25AM ET
www.investing.com/analysis/chart-of-the-day-nasdaq-bears-eye-summer-lows-200630233
Chart Of The Day: Nasdaq Bears Eye Summer Lows
By Fawad Razaqzada   |  Sep 23, 2022 07:25AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
NDX
+1.97%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
EUR/USD
-0.53%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GBP/USD
-0.84%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
XAU/USD
-0.34%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
Gold
-0.43%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
US10Y...
+1.35%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

After a busy week for central banks, nothing has changed to alter my bearish outlook on the stock markets. I continue to expect to see new lows on the year on the major European and US indices. The Nasdaq only needs to drop another 4%-5% to get there.

Admittedly, the markets do look a little bit ‘oversold’ following the sharp moves this week, so a bit of a rebound may be warranted. But we are likely to see the bears continue to defend their ground amid a bearish macro backdrop. 

The Nasdaq futures this week broke another support area around 11,750. The area around this level is now the most important short-term resistance zone that they need to defend. For as long as the index holds below here, the path of least resistance would remain to the downside towards the June low at 11,036.

Nasdaq Daily
Nasdaq Daily

The lower lows and lower highs, as well as the downwardly sloping 21- and 200-day moving averages all objectively tell us what we need to know. So, there’s no doubt that the trend is bearish right now. 

For now, and as I have been banging on about it, stocks remain rooted in a bearish trend. This week saw investors dump stocks hurriedly along with the euro, pound and nearly all other foreign currencies, as they watched yields continue to rise following a flurry of central bank action.

Among them, the US Federal Reserve announced a 75 basis point rate hike and signaled that it would continue to raise rates aggressively until inflation comes back under control. In response, bonds broke down, causing the yields on bonds with all maturities to move higher. The 10-year US bond yield broke above 3.7%, making low- and zero-yielding assets such as some technology stocks and gold even less appealing for yield seekers. 

In addition to mounting concerns about rising interest rates and inflation, the energy crisis is continuing to weigh heavily on the European economy as the Russian invasion of Ukraine drags on after Putin announced that military reservists will be sent to Ukraine as part of a "partial mobilization" of his forces. Today’s soft European PMI numbers underscore these concerns. Furthermore, there are growing concerns about the health of the Chinese economy, which has been held back by the government’s zero covid policy and global economic weakness amid surging price pressures.

Given these macro concerns and the technical outlook, I wouldn’t bother looking to buy the dips until the charts tell us otherwise. For traders shorting the indices, it has been a good year. This trend is likely to continue until something changes fundamentally.

Disclaimer: The author currently does not own any of the instruments mentioned in this article.

Chart Of The Day: Nasdaq Bears Eye Summer Lows
 

Related Articles

Chart Of The Day: Nasdaq Bears Eye Summer Lows

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (4)
G D
G D Sep 23, 2022 12:19PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
They really thought their little casino would go on forever, didn't they?
Don Vo
Don Vo Sep 23, 2022 9:57AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Congrat Wall Street
Casador Del Oso
Casador Del Oso Sep 23, 2022 9:34AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Excellent article. Imagine how low the Nasdaq will be by March 2023.
Kris Jay
Kris Jay Sep 23, 2022 9:34AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
hopefully it drives people to make better choices either at the ballot box or when better choices for those who stuffing ballots in un-monitored drop boxes in the five key counties within AZ, PA, MI, WI and GA.
Saeed Kerdari
Saeed Kerdari Sep 23, 2022 8:43AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Great article but buy the dips in my mind, its a good time now
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email