NASDAQ INC, Huge Bull-Trap Realized, Looking For More Downside!

11 Jun 2020

Hello Traders Investors And Community, welcome to this analysis about recent events, the current price-formation and what we can expect the next times in one of the leading global stock-market indices the NASDAQ INC, today we have seen exceptional volatility to the downside caused of new corona-fears hitting the market due to possible second lockdown restrictions and the resulting economic damage from which the economy is still suffering since the first pandemic wave and the resulting lockdowns. It is important to keep in mind that the stock market is still with a high possibility in a bear-market which can increase again, therefore, we need to keep a cool head and look at the given information to anticipate further price-moves and possible opportunities resulting of them, therefore we are looking at the 4-hour locals timeframe.

The last days we saw the index just confirming a new all-time-high little above the last all-time-high at the 121.3 level which you can see marked in my chart in red, we got a small consolidation there which indicated a reversal in that level and supply entering the market, therefore, it was just logical that we got the counter-reaction to the downside. At all this was not a complete bearish sign signaling bearish pressure for weeks to come but this condition altered with the break of the lower boundary of that up-trend-channel the index was trading within, this gave a first signal that the index will look for lower levels to test in the structure. At the all-time-high-bull-trap, we also saw a bearish MACD-signal which confirmed the reversal and indicated before it happened and took the fast volatility condition it is currently trading in.

When we examine the bearish pressure increase the next times there is the further important support-level at the 200-EMA which you can see marked in my chart with black, when this level will be reached from the NASDAQ it will be a huge test and it must be hold to develop a possible bullish reversal and stabilize in the structure, otherwise, when this does not happen and the index falls below the 200-EMA we can expect bearish pressure to increase to the downside with a high possibility. As you can see it in my chart we have the BEARISH GROUND below that level where the index will show more bearish volatility when traded in this zone. A confirmed bear-market will happen when we cross the 95 level to the downside and the bearish-EMA-signal you can see in my chart has properly emerged, in this case we can look for a possible opportunity on the downside.

At the moment we have an important and significantly meaningful decision-point in the global markets, especially the huge indices and overall stock-market. This means that we can see a second leg to the downside similarly as we have seen it at the beginning of the current corona-crisis. Therefore we need to keep patients, look for decent profits in the ongoing volatility , and illuminate how the situation will develop the next weeks therefore it is important to be prepared for possible trend-changes and volatility shown up in a reversal. Many people called for the complete bull-market since we had this bull-run last weeks but this is at the moment a highly illogical approach because the real economy and stock market are still in an unnatural discrepancy together with the stock-market making gains and the real economy declining which cause a speculative rally more than a healthy fundamentally confirmed uptrend.

In this manner, thank you for watching, support for more market insight, have a good day and all the best!

Information provided is only educational and should not be used to take action in the markets.