Nasdaq 100 IndexShort
Nasdaq Pulls a Houdini? Fake out or the next bull run?
Updated
Hello Traders!
Here is my analysis of why I believe NasdaQ will turn bearish end of this year, and H1 of 2024.
1. Macroeconomic Headwinds:
Slowing Global Growth: The global economy is projected to decelerate in 2024, impacting corporate earnings and investor sentiment. The ongoing war in Ukraine, persistent supply chain disruptions, and tighter financial conditions in major economies like the US and China will likely contribute to this slowdown.
High Inflation: Despite recent declines, inflation remains a formidable force. Central banks, particularly the Federal Reserve, are expected to continue raising interest rates to tame inflation. This tightens monetary policy, making borrowing more expensive for businesses and consumers, dampening economic activity and potentially triggering an equity market correction.
Recessionary Risks: The combination of high inflation, rising interest rates, and slowing growth raises the specter of recession in 2024. A recession would significantly impact corporate earnings, particularly in tech-heavy sectors like the Nasdaq.
2. Valuations in Overdrive:
Nasdaq Bubble 2.0?: Despite a 2023 correction, the Nasdaq still hovers around historically high valuations. Many high-flying tech stocks remain significantly overvalued relative to their earnings potential. This makes them vulnerable to corrections, especially in a risk-averse environment.
Speculative Frenzy: Retail investor participation in the market, spurred by online platforms and meme-stock mania, has contributed to inflated valuations in recent years. However, as volatility re-emerges and confidence falters, these investors are likely to exit the market, further fueling the downward spiral.
3. Industry-Specific Challenges:
Tech Earnings Slowdown: Tech companies' breakneck growth rates are likely to moderate in 2024 as the post-pandemic boom subsides. This, coupled with rising costs and competitive pressures, could lead to earnings disappointments and stock price declines.
Regulatory Crackdown: Increased scrutiny from regulators on anti-competitive practices and data privacy concerns could further weigh on tech companies' valuations and business prospects.
4. Geopolitical and Social Uncertainties:
Escalating Global Tensions: The ongoing war in Ukraine and rising tensions between the US and China continue to inject uncertainty into the global market. Geopolitical instability can trigger risk aversion and capital flight, impacting equity markets.
Social Unrest: Growing income inequality, social unrest, and political polarization could further destabilize the economic and market environment, leading to increased volatility and risk aversion.
While bulls may offer counterpoints on individual factors, the confluence of these bearish elements creates a potentially potent force. Investors should exercise caution and carefully consider portfolio diversification to weather the potentially turbulent seas of 2024.
Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Investors should consult with a financial advisor before making any investment decisions.
Here is my analysis of why I believe NasdaQ will turn bearish end of this year, and H1 of 2024.
1. Macroeconomic Headwinds:
Slowing Global Growth: The global economy is projected to decelerate in 2024, impacting corporate earnings and investor sentiment. The ongoing war in Ukraine, persistent supply chain disruptions, and tighter financial conditions in major economies like the US and China will likely contribute to this slowdown.
High Inflation: Despite recent declines, inflation remains a formidable force. Central banks, particularly the Federal Reserve, are expected to continue raising interest rates to tame inflation. This tightens monetary policy, making borrowing more expensive for businesses and consumers, dampening economic activity and potentially triggering an equity market correction.
Recessionary Risks: The combination of high inflation, rising interest rates, and slowing growth raises the specter of recession in 2024. A recession would significantly impact corporate earnings, particularly in tech-heavy sectors like the Nasdaq.
2. Valuations in Overdrive:
Nasdaq Bubble 2.0?: Despite a 2023 correction, the Nasdaq still hovers around historically high valuations. Many high-flying tech stocks remain significantly overvalued relative to their earnings potential. This makes them vulnerable to corrections, especially in a risk-averse environment.
Speculative Frenzy: Retail investor participation in the market, spurred by online platforms and meme-stock mania, has contributed to inflated valuations in recent years. However, as volatility re-emerges and confidence falters, these investors are likely to exit the market, further fueling the downward spiral.
3. Industry-Specific Challenges:
Tech Earnings Slowdown: Tech companies' breakneck growth rates are likely to moderate in 2024 as the post-pandemic boom subsides. This, coupled with rising costs and competitive pressures, could lead to earnings disappointments and stock price declines.
Regulatory Crackdown: Increased scrutiny from regulators on anti-competitive practices and data privacy concerns could further weigh on tech companies' valuations and business prospects.
4. Geopolitical and Social Uncertainties:
Escalating Global Tensions: The ongoing war in Ukraine and rising tensions between the US and China continue to inject uncertainty into the global market. Geopolitical instability can trigger risk aversion and capital flight, impacting equity markets.
Social Unrest: Growing income inequality, social unrest, and political polarization could further destabilize the economic and market environment, leading to increased volatility and risk aversion.
While bulls may offer counterpoints on individual factors, the confluence of these bearish elements creates a potentially potent force. Investors should exercise caution and carefully consider portfolio diversification to weather the potentially turbulent seas of 2024.
Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Investors should consult with a financial advisor before making any investment decisions.
Trade active
Trade active
Keeping the trade active, came in at a perfect spot for a short.going to see it trickle down to 15k over the next 1 - 2 months.
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Reloaded the position, Risk to reward is absolutely worth it here given the weakness in the santa rally.Note
Santa rally is definitely weaker than previous years, given the outlook of the global economy and what's happening in the middle east with escalations, dollar getting weaker and energy (gas) spiking over 5%, we are in for a ride in 2024. Get your shorts in now whilst you can. Keep tight SL! Not financial advice!
Trade active
Still active reloaded at the top's as mentioned, stellar trade.Note
Still active took some profits, absolutely stunning trade so far.Trade active
Partial profits taken already, 50% of the trade still active.Trade active
Still activeTrade active
Trade reloaded!Note
Still selling and adding small positions until my SL top range breaks, overall risk of 1.5% of my portfolio, return over 20%+ if it plays outNote
The trade is at first resistance point where it can reverse, jumped onto this Short, next big short will be at the second level.Note
Price rejected by first resistance points, and position is now in profit. Today big news coming from the US, so if the NasdaQ goes up today, I will be scaling the position further, seeing Tesla struggle massively and missed all revenue points means that consumer spending is getting weaker.Trade active
Trade is still active, we are starting to see huge turnaround on lower time framesNote
Perfect scenario right here, looking for a turn around on the market, if it breaks decisively above 18000 on a daily/weekly candle I expect for the stock market to push to 18500.Trade active
Perfect rejection of my level, shorted it at the resistance point. Today massive news for US, I believe inflation will come higher than expected which will send stocks crashing down.
However, keep a tight stop loss just above yesterday's resistance point, as if the inflation comes in lower than expected, we will have a parabolic move which will be temporary I believe
Trade active
Absolutely amazing returns on my long term portfolio so far, taken some partials of around 15% of total position.Trade active
Trade is very much active - tread with caution on this one, given the AI bubble it may very well rally to 18500 before dropping back down to 16000 where mean reversion lies.Trade active
Took some partials now, phenomenal trade played out perfectly.Trade active
The trade is very much active - refreshed my position on Friday when I saw a huge rejection on 4h time frame and failing to hold higher highNote
Trade is still active until it breaks highs!Trade active
Trade active again and position has been reloadedTrade closed: stop reached
For now stop has been reached, need to see a small time reversal on the NQ, for now we have made 1:4 RR which has been fantastic in day trading and partial swings.AI bubble is real and until that bubble pops there will not be a correction.
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Rentered at 18250 after seeing multiple rejections.Trade active
Profit taken at 18000, trade still active.Trade active
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Trade again reloaded at the same price 18250, SL just above 18450 risking 1.5% with RR of 1:5!Trade active
Rentered for the final time should it break 18600, out of the position fully and going to wait on lower time frames for a change in directionTrade closed manually
Out of it, it was only a small tester, at the moment Nasdaq is unstoppable and until it shows weakness on lower time frames, I will not jump in again, need to reevaluate this play in the near term.Overall made 3.5% risk return due to day trading and scalping out positions.
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Trade re - entered at 18320 really like the recent waterfall drop in futures, really tight stop just above day highsTrade active
Reloaded the trade again, stop loss just above ATHTrade active
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Still active for nowTrade active
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Still active 2% in profit since it reached all time highs, trade is available until it breaks new ATH.Trade active
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Trade active
Beautiful trade over 3% in profit, partials taken on Futures.Note
Amazing trade that's still activeNote
Expect the market to correct slightly as it was deeply oversold, be aware earnings are coming out in Tech soon, I believe they will be weak overall, especially on the consumer side.Trade active
As expected market bounced then instant sell off after weak GDP dataTrade active
Trade active
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