NASDAQ Could Lose 20 Years of Gains - NDX100

17 Mar 2020

The use of technical analysis can be extremely enlightening when trying to evaluate were a new bear market might end.

I am currently in cash, and I am working on understanding where the value zone is for stocks. The value zone is the area where the supply and demand equations shifts from fear to greed.
Right now, the market is in freefall and even the Philippines has closed their exchange indefinitely.

Interestingly it took the NASDAQ 100 16 years to recover from the DOTCOM 2000 crisis.
Since then 2008 bottom is has risen an incredible 804%
So, from that meteoric rise, it is a long way down.

The NDX100 has lost 27% so far and has broken through the 2018 support and I am sure will break the 4-year support line soon.

There is a possible 32% further drop back down to the year 2000 high which would wipe out 20 years of gains.

I would see great value when the Nasdaq 100 drops under 6000.

Technical analysis comes with some caveats that many technical analysts will not discuss:
1. Government intervention massively impacts the supply and demand equation.
2. Drops in Interest rates and a nearly $1 Trillion Emergency fund will change the outlook.

Ultimately the governments need to protect people, protect jobs and ensure the sick are looked after. That is more important than money.

I wish all of you and your families good health and wish you all a happy lockdown as our civil societies go into isolation.

Barry