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Nasdaq index – is correction over?

Last days’ risk-on mood encouraged by Trump’s tweets translated some renewed optimism to markets. Many traders would like to believe the correction is over. October proved again to be damned month for traders and reasons cited for this decline are various – trade wars, Chinese yuan, FED’s behavior, yields and recently November mid-terms in USA. OK, if you recall how markets received the boost after Trump’s election, you may understand the theory.

But all that said, I personally believe this correction was (and still is) inevitable because technically charts were literally screaming for it.

Nasdaq H4 Nov 1

Nasdaq 4h chart

Ok, now is it over? On H4 chart, very visibly last day’s rally was rejected at 7020-7040 resistance  level and it is likely we will see price to test it again. I personally would bet on price to decline  further to  6900 and 6855 supports. If price break below 6855, then there is high chance the correction continues.

In general, I do not think this correction is over.  For today I will sell from current levels with tight stop above 7040. If stops triggered, wait for price to pull back to this price zone and sell again. Mid-term traders may as well add short positions at 7090,  7150 and 7290 levels.

Have a nice day !

Fuad