Nasdaq Down 9 of 10 Weeks: Bullish?
One of the crucial vital causes to verify market stats is that they reduce via the market noise, manipulation, and misconceptions. For 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 Avenue is the grasp manipulator. In actual fact, since 1978, when the Nasdaq Composite is down 9 out of 10 weeks, comparable episodes of promoting have seen the NASDAQ increased 3 months and 1 12 months later each time, with a median acquire of 32.5% after 1 12 months. (Supply: The Market Stats, @TheMarketStats)
Picture Supply: The Market Stats
QQQ: Basic 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 via an apparent stop-loss zone helps wash out weak fingers, setting the stage for a transfer in the wrong way. Friday, the Nasdaq 100 Index ETF (QQQ) noticed a traditional cease hunt beneath the 200-day shifting common. Friday, QQQ closed beneath the 200-day shifting 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 doubtless shaken out and the index is able to transfer increased.
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. For example, final week Micron (MU) reported document 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 corresponding to NVIDIA (NVDA), Broadcom (AVGO), and Dell (DELL) additionally handily beat Wall Avenue 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 response to a number of sentiment indicators, just like the CNN Concern & Greed Indicator, traders are extraordinarily pessimistic. In actual fact, the CNN Concern & Greed Index is in “Excessive Concern” territory and has simply reached its highest worry stage since late final 12 months. Because the Nasdaq recovers, bulls that have been shaken out might want to purchase again shares, and bears can be pressured to cowl shorts, including gas to the fireplace.
Picture Supply: CNN
Historic Precedent: A lot of Room Larger
The web growth of the late 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 increased, ending up 402% because the historic second. Concurrently, the Nasdaq has ripped 90% within the three years because the ChatGPT debut, and lately hit some turbulence. Will historical past repeat? If the precedent holds true, there’s much more room for the Nasdaq to maneuver increased. (Supply: Ryan Detrick, Carson Funding Analysis)
Picture Supply: Carson Invesment Analysis
Valuations are Engaging
Tech shares stay extraordinarily low-cost. Immediately, 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 realize 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 current cease run, continued strong earnings development, and a gorgeous valuation, QQQ offers an uneven lengthy setup versus Friday’s lows. Extra aggressive traders could 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 realize +100% or extra within the coming 12 months. Whereas not all picks will be winners, earlier suggestions have soared +112%, +171%, +209% and +232%.
Many of the shares on this report are flying below Wall Avenue radar, which offers an amazing alternative to get in on the bottom flooring.
Immediately, See These 5 Potential House 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 Avenue SPDR S&P 500 ETF Belief (SPY): ETF Analysis Experiences
ProShares UltraPro QQQ (TQQQ): ETF Analysis Experiences
This text initially revealed on Zacks Funding Analysis (zacks.com).
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.
