The Beginning of the Nasdaq Downtrend

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Hello, this is ChartInfo. Today, we’ll be discussing shorting the Nasdaq.

Currently, the Nasdaq is showing a strong bearish trend as multiple geopolitical issues overlap with private credit fund redemption concerns. As I mentioned in my previous post, I’m glad to see the short signal play out as expected. However, one thing you must keep in mind is that the Nasdaq tends to move upward in the long run. Don’t forget to take profit and exit your positions once you’ve secured a reasonable gain.

Here are three key factors you need to understand regarding the current market situation

1. Geopolitical Issues (War)

With the ongoing conflict between the U.S. and Iran, oil prices are skyrocketing. Crude oil is a critical driver of the global economy; when prices rise, it puts a strain on citizens worldwide. Naturally, as war breaks out and oil prices climb, demand for safe-haven assets increases, driving the US Dollar (USD) higher. As the dollar shifts from weakness to strength, the Nasdaq inevitably faces downward pressure. The core issue is that the conflict is not yet over. While the U.S. holds the upper hand, Iran is likely to target refineries or key infrastructure in neighboring countries, which could further spike oil prices.



2. Private Credit Fund Redemptions

It’s no exaggeration to say that private credit redemption issues are currently the biggest factor behind the Nasdaq’s decline. I’ve included a link with more details, so please give it a read. Simply put, investors are requesting redemptions to get their capital back, leading to a massive capital outflow. The scale of this movement is so significant that the entire global financial market is keeping a close watch.

https://www.investing.com/news/stock-market-news/private-credit-funds-slide-as-investors-sell-out-4557377

https://www.wealthmanagement.com/alternative-investments/morgan-stanley-cliffwater-cap-redemptions-as-outflows-surge

3. Technical Analysis

From a technical analysis perspective, the Nasdaq has recently broken below its long-term trendline, and the RSI (Relative Strength Index) is showing a sharp decline. Since the long-term trendline has been breached, it is now highly likely to act as a strong resistance level moving forward.





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