Orderly Selloff?
As silly as that sounds it still does not feel like we have seen the white of the eyes of the bulls even with the Nasdaq now 14% off its most recent 52-week highs, and falling 4% Monday. Notice here that the Nasdaq WEEKLY chart Monday undercut its 50 WEEK SMA, an area that was a launching pad after some decent-sized pullbacks in Q4 ’23 and Q3 ’24. There are still 4 more sessions this week for it to recapture that line, but what would be the catalyst? Perhaps the catalyst is that absolutely no one is talking about a market rally whatsoever, not even a dead cat bounce. I have been fielding a lot of questions from folks I have not heard from in a long time, which says we are likely getting close, but the MONTHLY chart below of Nasdaq 100 stocks above their 200-day SMA is still in the upper 40s. My response to these inquiries is that let that number come into the teens, a number it has hit 5 times over the last decade. The VIX now seems to be comfortable above the very round 20 number, a former pesky level to get above. It is entirely plausible that it may set up a new range between 20-30 like it did in 2022 and notice the pervasive downtrend on the Nasdaq throughout that time period. Again be very nimble in this environment. In “liquidation” phases, technicals do not always matter. Of course, one has to be open-minded to anything happening, but bulls sure need to step up soon.