Nasdaq at a Crossroads: Is a Short Impending?

 

Nasdaq at a Crossroads: Is a Short Impending?

The global stock market is currently standing at a critical crossroads. With the outbreak of war, there has been a strong shift toward safe-haven assets, and the U.S. unemployment rate has also risen. Various markets that seemed to rise without end, such as Korea and Taiwan, are now showing a sharp downward trend.

The Nasdaq has also broken below a long-term trendline that had previously provided support multiple times. I am not a "permabear" (short devotee), but considering the current geopolitical issues and the chart patterns, I believe it is a fact that short positions are more favorable than longs at this point. However, since market makers (whales) rarely give away profits easily, I recommend that if you do go short, use low leverage and set your stop-loss somewhat wide.

Looking at the image above, the market is currently undergoing a retest of the long-term trendline. If this retest fails, a significant drawdown could follow. The movement I anticipate is a brief break back above the long-term trendline, followed by some consolidation (choppy movement) around that level before a final drop. As this is a period of high volatility, please trade with caution. Thank you.

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