Heisenberg
Stock Chartist, Long/Short Ideas
The Nasdaq 100 could fall another 6-7% if it repeats its last drawdown. Futures are bouncing, so the test is whether it convincingly holds a key support line this week; a capitulation with RSI under 30 is possible if three of the four Magnificent 7 names reporting drop on earnings. Seasonality, a new Fed chair, the midterms, an on-and-off war, sticky inflation and elevated bond yields are all in play while equities stay resilient, and something has to give. x.com x.com
A breadth thrust and fresh buying point to at least a multi-week rise in US indices, most probably a big rally for a few months after the midterms. LS Breadth is flipping bullish as the bear count falls; more stocks are starting uptrends and first consolidations. The Nasdaq 100 is bouncing with strong breadth, and the S&P 500 looks ready to leave a massive base. The Nasdaq 100 could sell off at declining averages but should rise if broad selling does not return. x.com
Rising S&P earnings revisions and a Nasdaq valuation far below the 2000 bubble level argue against a bull trap in US large caps. Nasdaq trades at 18x forward earnings versus over 80x in 2000. Positive breadth divergences, record short ETF exposure and put volume, and semiconductors waking up add to the case. In all 19 post-midterm instances cited, markets were very green over the following 12 months. x.com x.com
Forward risks matter more than good earnings for the Nasdaq now. The index looks to be topping and has a good shot at 28,000 before a rally after the midterms; tomorrow's PCE and GDP releases are unlikely to help, and this week's lows could break. x.com x.com
Anthropic's S-1 and @UncleAlpha007's claim that Microsoft is growing despite a 27% headcount cut have turned the near-term tech-equity view bullish. At least a tradable rally is expected; further upside depends on Iran developments and PCE. Stay nimble. x.com x.com
Bubbles rarely end when expected and tend to run much further, so the Nasdaq looks to be in a shakeout rather than at the end of its advance. Nasdaq at 40,000 or 50,000 is not out of the question in a melt-up; those who buy this dip will be greatly rewarded if positioned correctly. x.com x.com
The Nasdaq 100 faces short-term downside because a failed push to a new high leaves crowded bullish sentiment vulnerable to a break below. Despite record institutional accumulation and a long-term bullish position, five months of chop, a failed ATH and an attempted loss of the bullish trend favor hedging rather than adding leverage. x.com x.com
Uncertain AI-capex profits and higher oil costs from Iran still threaten US stocks. The SPCX-Nvidia deal brought much-needed overnight inflows to chips and is shifting sentiment, but tech's waterfall decline will not heal with a sharp V-bottom. Be prepared for a big fade. x.com
Server CPU demand amid AI buildouts gives Intel's upcoming Q3 earnings a fundamental role in its bounce setup. The market expects roughly $16.5 billion in revenue; a potential triple bottom at $87 coincides with the 200 EMA, making a decent bounce highly likely from here. JPMorgan upgraded Intel from Underweight to Neutral, citing better execution and valuation. Losing the 200 EMA would invalidate the pattern and be a significant bearish signal. x.com
Disappointing Amazon earnings make a Nasdaq 100 decline to the bottom of its range near 700 look likely tomorrow. It may be forming a range like the one that preceded the decline into the March low, but a sideways phase lasting as long as that one looks unlikely. x.com x.com
The Nasdaq 100's drop on OpenAI's scary news is an overreaction, and mega caps remain very healthy. AI bubble fears let market makers scare retail and buy behind closed doors. Once the index tests 736-738 as its 21-day moving average catches up, it should take off again toward 800, led by Meta, Alphabet, Amazon, Broadcom, Nvidia, AMD and TSMC. x.com x.com