Nasdaq moves away from its 200 week moving average
The NASDAQ
NASDAQ
The Nasdaq Stock Market or NASDAQ is an American stock exchange. It trails only the New York Stock Exchange (NYSE) in market capitalization and is part of a network of stock markets and options exchanges.Launched back in 1971, NASDAQ is the acronym for the National Association of Securities Dealers Automated Quotations. Since then it is known simply as NASDAQ and has become one of the most influential exchanges worldwide.The NASDAQ was the world’s first electronic stock market, and has since assumed the majority of major trades that had been executed by the over-the-counter (OTC) system of trading.What Makes Up the NASDAQ?In particular, the exchange also features the NASDAQ Composite, which includes almost all stocks listed on the NASDAQ stock market. Along with the Dow Jones Industrial Average (DIJA) and S&P 500 Index, this is one of the three most-followed stock market indices in the United States.Overall, the NASDAQ stock market has three different market tiers. This includes the Capital Market, or an equity market for companies that have relatively small levels of market capitalization. The listing requirements for small cap companies are less stringent than for other Nasdaq markets that list larger companies with significantly higher market capitalization.Additionally, the Global Market is made up of stocks that represent the Nasdaq Global Market. The Global Market consists of 1,450 stocks that meet the exchange’s financial and liquidity requirements, and corporate governance standards.Finally, the Global Select Market is a market capitalization-weighted index made up of 1,200 US-based and international stocks that represent the Global Select Market Composite.
The Nasdaq Stock Market or NASDAQ is an American stock exchange. It trails only the New York Stock Exchange (NYSE) in market capitalization and is part of a network of stock markets and options exchanges.Launched back in 1971, NASDAQ is the acronym for the National Association of Securities Dealers Automated Quotations. Since then it is known simply as NASDAQ and has become one of the most influential exchanges worldwide.The NASDAQ was the world’s first electronic stock market, and has since assumed the majority of major trades that had been executed by the over-the-counter (OTC) system of trading.What Makes Up the NASDAQ?In particular, the exchange also features the NASDAQ Composite, which includes almost all stocks listed on the NASDAQ stock market. Along with the Dow Jones Industrial Average (DIJA) and S&P 500 Index, this is one of the three most-followed stock market indices in the United States.Overall, the NASDAQ stock market has three different market tiers. This includes the Capital Market, or an equity market for companies that have relatively small levels of market capitalization. The listing requirements for small cap companies are less stringent than for other Nasdaq markets that list larger companies with significantly higher market capitalization.Additionally, the Global Market is made up of stocks that represent the Nasdaq Global Market. The Global Market consists of 1,450 stocks that meet the exchange’s financial and liquidity requirements, and corporate governance standards.Finally, the Global Select Market is a market capitalization-weighted index made up of 1,200 US-based and international stocks that represent the Global Select Market Composite. Read this Term index is trading to a new session lows. The current price is trading at 10643.46. That’s down -456 points or -4.11%. The low price just reached 10621.56
As mentioned in an earlier post, the Nasdaq index was testing the key 200 week moving average at 1.0795 area shortly after the open today. Early this week, the price dipped below that level but rebounded yesterday after the FOMC decision, giving traders hope for a technical rebound into the end of week trading.
However, the sharp decline seen at the open today, along with the subsequent follow-through selling has now pushed the price comfortably below that key moving average level. Stay below is bearish.
The last time the price of the NASDAQ closed below its 200 week moving average was during the week of March 16, 2020 at the start of the Covid lockdowns. That break lasted only one week. The next week the price closed higher and the bullish run started, ultimately sending the NASDAQ index up 144% from the March 2020 low.
Since then, the price has now fallen 34.3% over a 29 week period. During that time, the 50% midpoint of the move up from the March 2020 low has also been broken at 11421.82.
It would now take a move back above the 200 week moving average, and the 50% retracement level to tilt the bias more in favor of the buyers once again. Absent that, and the sellers remain more in control.
Looking at the weekly chart above, the next downside target comes against the:
Swing low from the September 20, 2020 trading week at 10519.49.
Below that the 61.8% retracement of the move up from the pandemic low comes in at 10291.29.
The swing high before the pandemic swoon to the downside back in February 2020 comes in at 9821.12. A move to that level would equate to a 39.4% decline from the all-time high reached in November. It is not unusual for stock markets to move down by that much during recession.
Of note is that the move lower during the pandemic move took the NASDAQ down -32.04%. The current decline of 34.4% from its November high has now surpassed that percentage correction move.
For the S&P index, it is currently trading down -126 points or -3.32% at 3664.28. IT remains above its 200 week moving average at 3502.60 and also above the 50% midpoint of the move up from the March 2020 Covid low at 3505.24. With both the 200 week moving average and 50% retracement within a few points of each other, that seems like a strong target on further weakness.
So far the S&P index has moved down 24.11% from its all-time high. A move to the 200 hour moving average of 50% retracement targets would imply a 27.17% decline from the all-time high. That still seems potentially low.
For your guide, the S&P index fell a whopping -35.41% during the Covid decline from February to March 2020.
S&P index remains above its 200 week MA/50% retracement
