Nasdaq Down 9 of 10 Weeks: Bullish?
Some of the essential causes to verify market stats is that they minimize by the market noise, manipulation, and misconceptions. As an example, most traders would presume that when the Nasdaq Composite is down 9 out of 10 weeks (as it’s now), shares are sometimes in a bear market, and decrease costs are on the horizon. Nevertheless, the market stats present simply the other, illustrating how Wall Road is the grasp manipulator. In truth, since 1978, when the Nasdaq Composite is down 9 out of 10 weeks, comparable episodes of promoting have seen the NASDAQ greater 3 months and 1 yr later each time, with a mean acquire of 32.5% after 1 yr. (Supply: The Market Stats, @TheMarketStats)
Picture Supply: The Market Stats
QQQ: Traditional Cease Run & Capitulation
A “cease hunt” or liquidity seize happens within the inventory market when a value motion happens particularly to set off a big cluster of stop-loss orders. Any such value spike by an apparent stop-loss zone helps wash out weak arms, setting the stage for a transfer in the wrong way. Friday, the Nasdaq 100 Index ETF (QQQ) noticed a basic cease hunt beneath the 200-day transferring common. Friday, QQQ closed beneath the 200-day transferring common for the primary time since mid-2025, triggering cease losses. Nevertheless, on Monday, QQQ is retaking the extent with authority, an indication that weak holders are possible shaken out and the index is able to transfer greater.
Picture Supply: TradingView
Quantity Explodes: Capitulation?
In the meantime, on Friday, quantity turnover within the S&P 500 Index ETF (SPY) spiked to its highest ranges since November’s market backside. Comparable quantity spikes have confirmed to be an indication of capitulation and have marked a number of market bottoms.
Picture Supply: Zacks Funding Analysis
AI Earnings Stay Sturdy
Regardless of geopolitical tensions and market volatility, earnings from main firms stay very strong, particularly in AI and AI-adjacent shares. As an example, final week Micron (MU) reported report income that jumped 196% year-over-year. The corporate cited booming AI demand for its high-bandwidth reminiscence (HBM) product and issued very robust Q3 income steering.
Picture Supply: Zacks Funding Analysis
In the meantime, different AI-related firms comparable to NVIDIA (NVDA), Broadcom (AVGO), and Dell (DELL) additionally handily beat Wall Road expectations and raised ahead steering. In different phrases, the basics beneath the ugly geopolitical headlines stay strong.
Bull Markets Climb the Wall of Fear
In accordance with a number of sentiment indicators, just like the CNN Worry & Greed Indicator, traders are extraordinarily pessimistic. In truth, the CNN Worry & Greed Index is in “Excessive Worry” territory and has simply reached its highest concern stage since late final yr. Because the Nasdaq recovers, bulls that had been shaken out might want to purchase again shares, and bears shall be compelled to cowl shorts, including gasoline to the hearth.
Picture Supply: CNN
Historic Precedent: Numerous Room Greater
The web growth of the late Nineteen Nineties is the closest precedent that traders must the present AI revolution. After the Netscape IPO in late 1995, the Nasdaq ripped 90%, discovered hassle 3 years in, then continued its rampage greater, ending up 402% for the reason that historic second. Concurrently, the Nasdaq has ripped 90% within the three years for the reason that ChatGPT debut, and just lately hit some turbulence. Will historical past repeat? If the precedent holds true, there may be much more room for the Nasdaq to maneuver greater. (Supply: Ryan Detrick, Carson Funding Analysis)
Picture Supply: Carson Invesment Analysis
Valuations are Enticing
Tech shares stay extraordinarily low-cost. Right now, the QQQ ahead P/E ratio is 21.95x. For context, throughout the 2000 web bubble peak, QQQ’s ahead P/E was north of 100x!
Picture Supply: MacroMicro
Bullish Seasonality
Shares have a tendency to achieve steam as spring begins. Over the previous 20 years, QQQ has been inexperienced in April ~75% of the time.
Picture Supply: Uncommon Whales
Conclusion
With a latest cease run, continued strong earnings development, and a lovely valuation, QQQ supplies an uneven lengthy setup versus Friday’s lows. Extra aggressive traders might can commerce the ProShares UltraPro 2x QQQ ETF (TQQQ) for extra leverage.
5 Shares Set to Double
Every was handpicked by a Zacks skilled because the #1 favourite inventory to achieve +100% or extra within the coming yr. Whereas not all picks may be winners, earlier suggestions have soared +112%, +171%, +209% and +232%.
Many of the shares on this report are flying underneath Wall Road radar, which supplies an incredible alternative to get in on the bottom flooring.
Right now, See These 5 Potential Residence Runs >>
Dell Applied sciences Inc. (DELL) : Free Inventory Evaluation Report
Micron Expertise, Inc. (MU) : Free Inventory Evaluation Report
NVIDIA Company (NVDA) : Free Inventory Evaluation Report
Broadcom Inc. (AVGO) : Free Inventory Evaluation Report
Invesco QQQ (QQQ): ETF Analysis Experiences
State Road SPDR S&P 500 ETF Belief (SPY): ETF Analysis Experiences
ProShares UltraPro QQQ (TQQQ): ETF Analysis Experiences
This text initially printed on Zacks Funding Analysis (zacks.com).
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.
