We don’t wish to get any individual terror, nonetheless an correct argument will be made for aggressively preserving tech stock holdings. If my memory serves me precisely, we haven’t shared this month-to-month chart since gradual 2021 (when it become as soon as featured on the December 21st, 2021, episode of Mad Money). At the time, we had been inspiring with the unhealthy, steeply sloped rally. Since then, the NASDAQ 100 corrected from factual below 17,000 to factual over 10,000, later rallying support to get original all-time highs. Nonetheless, those original highs are elevating some red flags.
In spite of the deep correction, the gains are quiet wildly outsized relative to historical bull market trajectories. The dotted dark line represents a pure market slope on the offered month-to-month NASDAQ 100 futures market chart. It is straight forward to perceive that despite the digestion from gradual 2021 via the tumble of 2023, the rally is quiet statistically outdated to schedule.
Additionally bearing on is the divergence within the RSI (Relative Strength Index). In 2021, shut to the height, the RSI on a month-to-month chart become as soon as studying 78.00. This day, with the NASDAQ 100 at the next note, the RSI is quiet below 70.00. This form of disconnect between note and oscillator is time and yet again a red flag for vogue exhaustion.
Lastly, we noticed that drawing a trendline from the dot.com bubble excessive via the 2021 excessive creates a trendline that will possibly possibly act as swift resistance at factual below 18,000 (no longer a long way from most up-to-date highs). Is this trendline arbitrary? Maybe, nonetheless in my ride, straight forward strains drawn on a chart work a long way extra most regularly than they ought to quiet.
If we principal to think about the chart beefy stop, lets get an argument that the NASDAQ 100 might possibly possibly factual to below 12,000. We aren’t ready to “elevate” into that theory factual yet. Election years are most regularly appropriate for markets, and the January barometer suggests 2024 is statistically put apart to be a obvious one general. Nonetheless, a correction seems to be to be forthcoming.
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There is sizable probability of loss in buying and selling futures and alternatives.
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