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Is Nasdaq About To Fall 25%?

ByChris Kimble
Published 10/29/2020, 01:50 PM
Updated 07/09/2023, 06:31 AM

Nasdaq Composite 25-Year Chart.

Technology is the lifeblood of our current economy and dictates future innovation. The sector has also taken a primary leadership role in the 11-year bull market.

But, as most of you are aware, that doesn’t mean that tech stocks are always smooth sailing. In fact, the Nasdaq and tech stocks can be a bumpy ride. Just check out today’s chart!

Displayed here is a “monthly” chart of the NASDAQ Composite, which highlights some a handful of large bearish reversal patterns.

The month of October is not over yet, however, it appears that the Nasdaq Composite Index is creating a rather sizeable bearish reversal pattern. As well, this move to the downside is occurring just after the index kissed the underside of the 261% Fibonacci extension level at (1).

Glancing back at recent history, you can see that a handful of large monthly reversal patterns have lead to significant declines of 25% or more.

Should October close out at current levels and confirm this bearish reversal pattern, it would send a message of caution to investors.

Latest comments

NASDAQ IS ABOUT TO FALL 25% [that is one another "crash" of 25% after March 2020 crash] -- THIS GUY KIMBLE MUST BE ONE SUPER GENIUS -- ROFL. There are so many genius "experts" that are calling for a market 'crash' that makes me even more bullish. The year 2020 has already had its market crash and that took place in March 2020. Have you ever heard a thing such as "double market crash in one single year" did you? Have you heard for example: "the double crash of 1987"? or the "double crash of 2008"? We had already a "market crash of 2020" and that was in March of 2020, if you can make another "market crash in 2020" PLEASE DO SO because that would be historical and unprecedented. I really would like to see that happening to update the market history books with such a phenomenon. So many "market experts" these days...ROFL
Double digit unemployment World pandemic that threatens more shutdowns and posting records high infections/deaths In 4 days, one of the most controversial presidential elections in the U.S. in recent decades State and local governments are suffering major budgetary challenges as payroll taxes continue to decline. Taxes must increase or major budget cuts. Commercial real estate in major cities experiencing an unprecedented decline as companies are realizing they don't need to spend tens or hundreds of thousands of dollars each month to lease office space when their employees can just work from home. The "average consumer" is becoming more and more accustomed to cheaper forms of entertainment and spending less on travel and leisure. I don't see a problem. /sarcasm
Double digit unemployment World pandemic that threatens more shutdowns and posting records high infections One of the most controversial presidential elections in our lifetime in 4 days State and local governments are suffering major budgetary challenges as payroll taxes continue to decline The "average consumer" is becoming more and more accustomed to cheaper forms of entertainment and spending less on travel and leisure. I don't see a problem. /sarcasm
This article is very scarse in info, just considerations that everybody can do!
If economic data keeps improving then yes because it means no more stimulus.
Do you think economic data can improve with all states moving into a new fresh lockdown? lolz
If the democrats get elected then yes
If biden gets elected ! Possible!
Meh, as long as the economy is rolling along we good. 25% stuff happens when the economy is bad.
You would remind that it doesn't take much to revert the economic numbers. Did you remember in March? Well, we have still the same problem. Definitely, this isn't an hoax!
I doubt Warren Buffett would be a buyer here. 🙂💰
Iceberg at sight. Dont cry later, you have been warned
betcha didnt know  .... nasdaq trading range from jan 2001 to jan 2012 was 1172 to 2892  !!  yeah, you dont believe it do you? check the charts ... & now its at 11000 !!
World changed a lot from 2012, nasdaq represent technology and tech is the present and the future of the world.
so overvalued fan boys. pay the old bears at the door boys
let the techs fall! buying opportunity!
Nice try
I think you can expect ups and downs till March, as the media is oit of control with the Covid agenda(besides seems like very few people know what is actually happening now a days).
ah yes but this guy knows everything
1999 Tech Bubble was a different story. Companies were not profitable/sustainable back then.
Lol is nio profitable?
 and 100% of big tech carrying the indexes are
and youre paying 3000 per share for 25 of earnings for amazon???,You dont understand metrocs well
We are getting close to 9 million cases of Covid-19. More important, people are about to see what exponential growth of the pandemic looks like. The flu adds 500,000 hospitalizations to this season. I think Trump and Powell have done a great job simulating a healthy market, mostly by propping companies like Boeing propped up just to keep them out of Ch 11. Big bankruptcies cause panic selling. Before Trump started writing checks to keep the con going, the NASDAQ was at 6500. Everything from there up to 11,000 was speculation and vulnerable to correction soon.
irvin.. apparently you missed the yesterday's CDC release of reducing the death toll from 200K down to 8K. We know about Joe...sounds like other people are on China' payroll as well.
What nonsense are you spreading? Go look at the CDC website, it clearly states 213k COVID-19 deaths and rising. Sorry your Administration failed you. There is hope to elect a new one very soon!
After APPLE earning, absolutely yes!
people are rainfall rationalizing why this can't happen. If the world enters a depression there will be less money to go around for everyone, including the tech darlings.
You know it and I know it, but RH investors don't. The market went down yesterday, and like trained pigeons, they all come in buying up airlines and TSLA.
Agree. But the problem is not much airlines, they are already crazy battled (I know that they can go much down), but we still have airplanes in the future. But, the real bloodbath is gonna be in this index that is higher than ATH
more ...  draw a line from the 1990 low to the 2009 low and extend it to now ... we could easily see 6k .... thats a 50% haircut.
just a reality check to everyone ....  nasdaq was below 1700 in feb 2009 ... that wasnt that long ago
credit spreads are narrow, interest rates are low, inflation is low, plus there is more fiscal stimulus inbound. all of which suggest another decline of 20% has a very low probability. unless of course the world decides to fully shut down again (which i personally doubt)
Agreed, price of a 2x4 at Home Depot has definitely doubled in the last 6 months... grocery prices are way up. Haven't found and deals on anything I want to buy, only rising prices.
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