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It's Do-Or-Die Time For Global Markets

By Chris VermeulenStock MarketsDec 02, 2021 05:35PM ET
www.investing.com/analysis/its-doordie-time-for-global-markets-200610292
It's Do-Or-Die Time For Global Markets
By Chris Vermeulen   |  Dec 02, 2021 05:35PM ET
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Almost all of the U.S. and global markets volatility has taken place over the last 6+ trading days. Even though economic data continues to show a strengthening U.S. economy and improved jobs market, the news of the Omicron COVID variant has spooked the global markets. I'm going to illustrate how the markets are nearing critical support levels that are a "do-or-die" level for the market, in my opinion.

Let's get right into the charts.

NASDAQ Support Nears $15,721, Should Act As A Solid Floor

This NASDAQ chart highlights the orange support level near $15,271 that I believe will act as a hard floor, support, for the U.S. markets. We may see $14,750 become the next downside target level if the NQ falls below this level on strong selling. If this support level holds, then I expect the U.S. markets to resume a rally trend and attempt to target $17,000 or higher before the end of 2021.

NASDAQ E-Mini Futures Daily Chart.
NASDAQ E-Mini Futures Daily Chart.

Custom U.S. Stock Market Index Confirms Support Near $15,721

This Custom U.S. Stock Market weekly chart highlights the key support channel that originates in early 2021 and spans across recent lows (the dark blue line). My opinion is that the alignment of the $15,721 support level from the chart above and this key support channel on the Custom U.S. Stock Market Index chart creates a confluence of critical support. This level becomes a “do-or-die” level for the markets to attempt to bottom and recover going forward.

Custom U.S. Stock Market Index Weekly Chart.
Custom U.S. Stock Market Index Weekly Chart.

Custom Volatility Index Sets Up Deep Potential Bottom Level

Lastly, this weekly Custom Volatility Index chart highlights the multiple deep downside support ranges that have continued to drive future price rallies since the original COVID collapse. The current Custom Volatility Index level is below the last two pullbacks in the U.S. markets and well within the support channel from late 2020 and early 2021.

This Custom Volatility Index would clearly show a breakdown in the U.S. markets by moving below the 6.0 to 6.50 level on strong selling pressure. That is currently not happening, and I suspect the lack of real selling pressure reflects a panic selling mode – not a change in true price trend.

Custom Volatility Index Weekly Chart.
Custom Volatility Index Weekly Chart.

My opinion is the U.S. markets will struggle to hold near recent lows – attempting to hammer out a bottom/base over the next few days. If these critical support levels fail to prompt a bottom in price, we'll know soon enough. The markets can stay irrational far longer than many people expect.

The next two to 5+ trading days should clearly show us if these support levels and channels are solid or not. If the global markets are going to continue to move lower, we should find out soon enough.

If I'm correct and the markets do hold up near these support channels, we may begin to see a new "rip-your-face-off" rally phase to start a powerful Santa rally closing out 2021. That would be incredible to witness and experience.

Watch for support near $15,721 to $15,750 on the NQ over the next 5+ trading days. I believe that level is the "do-or-die" level for the markets going forward.

It's Do-Or-Die Time For Global Markets
 

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It's Do-Or-Die Time For Global Markets

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Comments (8)
Ali Imran
Ali Imran Dec 06, 2021 8:22AM ET
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Caroline Tan
Caroline Tan Dec 03, 2021 8:28PM ET
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Nasdaq 100 has broken the support 15720. It is a die moment for nasdaq 100 come this Monday. Expect full blown selloff with 300-500points crash within a day. Forget about Santa rally. It is not going to happen this year because Powell has already mentioned that Fed wants faster tightening as soon as possible.
Jacques Bughin
Jacques Bughin Dec 03, 2021 8:09AM ET
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15271 or 15721? Confusing nasdaq is at 15271 now
Mohd Izhar Muslim
Mohd Izhar Muslim Dec 03, 2021 4:26AM ET
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thanks for the article 👍
Sr Ma
Sr Ma Dec 03, 2021 12:22AM ET
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Great article.
William Bailey
William Bailey Dec 02, 2021 10:27PM ET
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Die time
Brian Anderson
Brian Anderson Dec 02, 2021 9:24PM ET
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Guess he’s talking about the Nas 100. This article makes little sense.
Ashish Bhura
Ashish Bhura Dec 02, 2021 7:38PM ET
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Nasdaq is already below 15,721 support, dontou still see its going tonsrxond support of 14,750 and then year end rally
 
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