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Nasdaq fall – correction or harbinger of bear market ?

It was a bloodbath day and night for most of the world stock markets. Volatility index VIX raised most from April and biggest question is whether it is a correction or we entered bearish market finally?  China concerns and rising Treasury yields are what sparked selling but another  concern is yet to hit. The latest US inflation data is set to be released today at 1230 GMT and if there is any spike in inflation or wages, then the another leg of selloff is likely.

Nasdaq Oct 11 Daily
Nasdaq futures daily chart (aggregated)

Technically, however, we see the price arrived at the lower end of channel and early morning trade demonstrated some sign of bounce. Whether this bounce will end up in another rally is yet to be seen. I would personally won’t bet on it.

USA economy is doing well, so – this is if we digress from mounting problems in house construction and auto sectors, enormous debt and mere fact that current bullish market continues for almost 10 years.

Nasdaq Oct 11 H1

Nasdaq Dec futures 1 hour chart (aggregated)

Some bounce today is technically likely and tactical buys with close stop-loss below today’s minimum – those trades can be relatively safe. Buy from current levels and sell at indicated resistance areas of 7060, 7150.

However, the bearish impulse is huge and apparently, there will be attempts to  go lower. If price breaks below 6925 and accelerates, this is another reason to enter new shorts. Fasten seat belts, downsize your exposure because volatility is huge.

Safe trades and have a nice day!