My previous analysis on this same chart was obsoleted by the Tariffs announcement on "Liberation Day" - which caused the (tech) market to accelerate the drop down to almost 25% in the week of April 2
SO here's the updated view after "some recovery" from that low. For better visibility, i hid the price (as a faint blue line) so i can focus on the signals that *are really critical to see*.
What are we looking at here ?
==========================
- The thick purple and blue lines are 20 and 50 SMAs - the gray line is a 100 SMA
- this is a weekly chart representing NASDAQ 100 futures as a Tech market proxy
- Lower indicators are a MACD (showing momentum) and RSI (showing strength) - settings for these indicators are sync'ed to the price chart (so the 20/50 crossing will show on MACD as main line crossing zero, RSI is also set to 20 SMA)
What is scary here ?
===================
- we had a 20/50 SMA death cross (20 SMA moving below 50SMA on weekly chart) twice in the last 9 years - we're about to get one this week
- There are 2 main scenarios after a death cross forms, recovery and crash - as seen by the past crosses from December'18 and April'22 (Note: COVID crash didn't cause a death cross)
Why is this specific view important ?
==================================
Our trading plan needs to be adjusted (if crash, go to cash and wait, if recovery, ride the wave up) - for position traders, there's really no gain trading stocks in a market that is breaking down
what's next ?
==============
i'm watching this view to track what the market does next - with how dynamic the situation is with US market / economy, it's hard to tell which scenario will unfold. On one hand, US admin wants to show market improvement, and on the other, certain ill-planned economic "moves" are pulling the market down..
Which scenario do you think will unfold here?
SO here's the updated view after "some recovery" from that low. For better visibility, i hid the price (as a faint blue line) so i can focus on the signals that *are really critical to see*.
What are we looking at here ?
==========================
- The thick purple and blue lines are 20 and 50 SMAs - the gray line is a 100 SMA
- this is a weekly chart representing NASDAQ 100 futures as a Tech market proxy
- Lower indicators are a MACD (showing momentum) and RSI (showing strength) - settings for these indicators are sync'ed to the price chart (so the 20/50 crossing will show on MACD as main line crossing zero, RSI is also set to 20 SMA)
What is scary here ?
===================
- we had a 20/50 SMA death cross (20 SMA moving below 50SMA on weekly chart) twice in the last 9 years - we're about to get one this week
- There are 2 main scenarios after a death cross forms, recovery and crash - as seen by the past crosses from December'18 and April'22 (Note: COVID crash didn't cause a death cross)
Why is this specific view important ?
==================================
Our trading plan needs to be adjusted (if crash, go to cash and wait, if recovery, ride the wave up) - for position traders, there's really no gain trading stocks in a market that is breaking down
what's next ?
==============
i'm watching this view to track what the market does next - with how dynamic the situation is with US market / economy, it's hard to tell which scenario will unfold. On one hand, US admin wants to show market improvement, and on the other, certain ill-planned economic "moves" are pulling the market down..
Which scenario do you think will unfold here?
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.