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Nasdaq 100 Technical Outlook Deteriorates, Last Chance to Rally

Nasdaq 100 Technical Outlook Deteriorates, Last Chance to Rally

Paul Robinson,
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Nasdaq 100 Technical Outlook:

  • Nasdaq 100 is very close to resuming its downtrend
  • Needs to hold nearby levels to keep market afloat
  • A breakdown below support will have new cycle lows in store
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Nasdaq 100 Technical Outlook Deteriorates, Last Chance to Rally

Just last week the Nasdaq 100 looked headed to make a higher-high in what would seemingly be a summer time recovery sequence, but that outlook is quickly giving way again to the broader bear market. The thinking was that we would see higher before lower, but if support don’t hold that bias goes out the window.

The trend-line, top-side line of a descending wedge, from the spring was broken last week, however, to confirm the pattern we needed to see 12262 break. With the failure to do-so and the turn down there is one last test developing before new cycle lows becomes the focus.

The line that was broken from before is being tested today as support. If it and the recent low at 11351 fail to keep the market buoyed, then look for new lows beneath 11068.50. Whether that turns into a rout or not is unclear. The market seems more lethargic than panicky.

If we see support hold and the market turn higher the first big test will be up near the 12262 high. We may see the market simply correct some of the down-move with some range activity by failing to advance to a new higher-high, but if the market can get into gear higher levels could come into play.

One thing that I’m confident in, is that it is very unlikely we see the market rally strongly given we have yet seen a capitulation style bottom. The thinking has been recovery not rally, so even if the recovery morphs into a bit of a rally it is likely to fail and lead to another swoon during Q3.

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Nasdaq 100 Daily Chart

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Nasdaq 100 Charts by TradingView

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---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at  @PaulRobinsonFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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