Nasdaq-100 Index: There we go…

The NASDAQ-100 Index is a modified capitalization-weighted index of the 100 largest and most active non-financial domestic and international issues listed on the NASDAQ. No security can have more than a 24% weighting. The index was developed with a base value of 125 as of February 1, 1985.

The recent declines might feel overdone to some investors, but on the larger scale of things the declines are just beginning. After significant weakness within various indicators, sellers have finally forced a break below daily pivots. A double top pattern has been completed (very well visible on the 480-min intraday charts). The price target of this formation is minimally 7125.

For the longer term such a decline means a solid break below the cloud support and various trend lines one might draw. In other words, a full-swing corrective phase towards levels as low as 6970, ~6600 and possibly lower. More importantly, the expected zig-zag correction could even lead to a bearish reversal of the primary trend. Although it is too early to speculate on such a development, bearish potential is so large that an exit-long and entry-short for the coming weeks and months is highly justifiable.

Improvement only sets in above 7680. A level that is unlikely to be challenged in the current market phase.

  • Near term trend: negative
  • Long term trend: mature uptrend / late phase
  • Outlook: potential long-term trend reversal
  • Strategy: exit-long / short-entry
  • Support: 7125 / 6970 / 6600*
  • Resistance: 7680
  • Outlook cancelled/neutralized above 7680

Daily chart Nasdaq-100 Index

11 July 2018

The outlook on all time frames is precarious. A major consolidation pattern in the multi-year uptrend is unfolding, of which a DT is the most recent sign of weakness. Chances of a rather deep correction are significant, as is down side potential. The first levels of noteworthy support come in as low as 6750 <> 6670. Here a cluster of internal trend lines fall together. Slightly below this area the weekly cloud support is found (~6480).

The Nasdaq-100 is an absolute exit-long, especially below the minor support at 7120.

  • Near term trend: negative
  • Long term trend: neutral (double top)
  • Outlook: potential trend reversal
  • Strategy: exit-long / short-entry < 7120
  • Support: 7120 / 6750 / 6670 / 6480-
  • Resistance: 7300
  • Outlook cancelled/neutralized above 7300

Daily chart Nasdaq-100 Index

23 April 2018

The outlook on all time frames looks rather precarious. The recent recovery move is classified as a regular (albeit fierce) counter trend move within the down trend that commenced mid-March. In other words, sellers still hold the edge.

For the longer term things are quite fragile. A large double top pattern is unfolding with key support at 6400. However, if the near term down trend continues (with a conservative target of 6065), this will automatically mean that the DT is also completed, thus triggering a trend reversal on the weekly charts as well. Levels below 5700 then come into play (6+ month horizon).

Due to the large down side risk and critical resistance and stop levels nearby, we see the Nasdaq-100 index as a prime opportunity for building short-exposure to the broader market. All bets are off with a close above 6900.

  • Near term trend: negative
  • Long term trend: neutral (double top)
  • Outlook: potential trend reversal
  • Strategy: short < 6450
  • Support: 6450 / 6400 / 6238 / 6005 / 5690*
  • Resistance: 6900 / 7020 / 7140
  • Outlook cancelled/neutralized above 6900

420-minute intraday chart Nasdaq-100 Index