The tech heavy Nasdaq index log its fastest move from record to correction in history . A correction Is defined as a pullback that is 10% from the recent high. The question on everyone’s mind is “ is this really the top for Nasdaq and the Big Tech’s leadership of the US stock market, and the related unprecedented relative out performance of growth over value?
From my 30 years in the stock market it certainly looks like one and the recent events certainly fit the bill, be it stock splits by widely followed companies triggering euphoric retail-driven rallies (in this case Apple and Tesla) or the sudden exposure of a so-called “Nasdaq whale”. The FAANG stock today make up of 25% of the S&P 500 market capitalisation.
A week ago when Nasdaq 100 was trading near its all time high I predicted Nasdaq 100 will take a correction to 11200 and that was exactly what happened when the index fell from its high from 12439 on 2 Sep to 11145 on 4 Sep.
Will this 10 % correction turn into a 20 % correction with is the definition for a bear market . Well , tonight could be the make or break according to my trade plan. A break below 11050 will could trigger more downside and if prices stay above 11200 the uptrend could stay intact.
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