Two weeks ago, I explained how I saw NASDAQ peaking and warned about a correction. The correction has indeed happened but I also mentioned that it was too early to tell if it would crash. Things have become clearer now and this post is to update on where I think NASDAQ could go to.
After the FOMC meeting last week, the US stock market had a sell off after Jerome Powell indicated that interest rate will stay near zero for next three years until US get back to maximum employment and 2% inflation.
Market perceived the Fed has exhausted its options and has limited tools to stimulate the economy.
That said, many technical analysts saw the correction as a healthy one and were calling for buys on possible rebounds from the 50 day moving average. But I beg to differ.
The S&P 500 index has broken below the 50 day moving average. This doesn’t look good.