Joe Perry October 5, 2021 9:01 AM
Tomorrow is Tuesday and we often see a bounce back after a big Monday selloff
On May 12th, the NASDAQ 100 established its most recent low at 12,967. From there it was off to the races throughout the summer months until the unofficial end of summer, Labor Day, when traders returned to their desks and the NASDAQ 100 made and all-time high of 15,701.40. Those highs were nearly a month ago, and today, the large tech index retraced to near 50% of that prior move. Today’s low was 14,384.93, down over 2.15% on the day and down 8.38% from the September 7th highs!
There was lots of blame to be thrown around since the pullback from the all-time highs, which include:
- Possible Fed tapering
- China/US relations
- China tech crackdown
- Supply chain issues
- Impending energy shortage
- Its September (now October)
- Slowing growth
- The Delta variant
- US debt ceiling
The reason doesn’t matter. The there are bound to be more reasons going forward if price continues lower, the first of which may be worse than expected Q4 earnings and lower guidance.
14,334.29 will be key, as it’s the 50% retracement level from the prior move higher. The 61.8% Fibonacci retracement level from that same time period and the 200 Day moving average sit just below near 13970/14,010. The target for the break of the ascending wedge is 12,967.18.
Source: Tradingview, Stone X
On a 240-minute timeframe, notice that the RSI is in oversold territory, which makes for a great “Turnaround Tuesday” opportunity. Resistance is just above at 14,555.12, followed by Friday’s highs of 14,830.84 and then the gap opening from September 28th at 15,404.57.
Source: Tradingview, Stone X
As mentioned, tomorrow is Tuesday and we often see a bounce back after a big Monday selloff in the markets. However, as always, be cautious because “this time may be different”
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