Figure 2: The NASDAQ on a daily chart
In the daily chart, we can clearly see the bearish trend, when the so-called death cross was created at a point 1
, when EMA 50 came under SMA 100. At point 2, an even stronger signal is starting to emerge.
In the bearish trend, it is better to look for places where it is suitable to speculate on the decline. These could be near some of the identified resistances:
is in the band 8,500 – 8,600. Here is Fibo 61.8% of the decrease between points A and B. At the same time it is the level at which the daily chart EMA 50 fell below SMA 100 and thus confirms the downward trend. Currently it is also the level where the average SMA 100 is.
is at the level of 9,050 – 9,100. It is the Fibo level of 78.6% of the distance between points A and B.
is on the level of 7,900 – 8,000. There is a break of previous resistance.
is in the band 7,370 – 7,460.
The chart shows the rising trend line, which starts at point B. The signal to decline could then be considered when a break of this line occurs, when the daily candlestick closes below it.
The SP 500 Index
There is a correlation between the NASDAQ and the SP 500, but there were interesting differences between them, as shown in Figure 3: