NASDAQ is likely building a massive H&S

We’re very likely seeing the development of a H&S reversal pattern on the NASDAQ.

Completion of the right shoulder is likely to take place over the next 2-4 weeks, especially when the impact of tariffs starts to become more pronounced through macroeconomic data and continued port volume shrinkage. The latter will create strong visuals for retail traders, further eroding consumer confidence.

The impacts of tariff negotiations on fundamentals are negligible. Even if agreements with all nations are inked today, 100% restoration of damaged supply chains would still be months away, particularly with China. A shift of the supply curve to the left is naturally inflationary. The resulting impact on Q2 earnings will likely be severe for many sectors as overhead/inventory costs will swell considerably.

The Fed has also signaled that relief via rate cuts will not happen, despite negative GDP growth, as long as inflation continues to climb. Given the inflationary nature of tariffs, it is highly unlikely we’ll see inflation reverse course in the near-to-intermediate term. Coupling this trend with continued negative GDP growth is the definition of stagflation.

If the above plays out, we should see additional growth to around 18,600 with decreasing volume, followed by a reversal that takes us to approximately 12,000. Continued macroeconomic deterioration could drag this even lower.