PhotonBull
Equity Researcher, Co-Runner of Retail Club
The Nasdaq 100 looks ready for a gap down, leaving trimming with trailing stops or sitting on the sidelines as the only way to survive. x.comÂ
The Nasdaq 100 looks stretched, making it prudent to trim extended names into strength, be more selective and size new buys smaller. QQQ is 7 ATRs above its 50-day moving average, and leaders such as Sandisk, Micron and leveraged Korea are heading for exhaustion moves. The US-Iran peace proposal could become a short-term sell-the-news event, though if earnings stay positive and the AI-productivity narrative returns, the market can run higher. x.comÂ
The pause in attacks until the November 3 midterms is the catalyst for the next leg up in risk assets, including bitcoin, US small caps and long-dated Treasuries. x.comÂ
Nasdaq-100 downside could accelerate if QQQ falls below $712: dealer positioning at $700 and $690 would fuel the move unless the index reclaims its moving averages and breaks upward. July and September FOMC lows remain untouched, something that has not persisted across two consecutive meetings; taking out at least one in the next week would not be surprising. x.comÂ
QQQ's remaining earnings, macro and election hurdles set up one more dip to punish late chasers. The index looks good and is pricing in some good news today, but Amazon, Intel and SanDisk earnings plus PCE and GDP arrive tomorrow, followed by AMD earnings and elections Tuesday. Expect one more, probably modest, dip Wednesday or Thursday next week before November's upward seasonality takes effect. x.comÂ
The Nasdaq 100 may be nearing a breakout after about three months of sideways chop since the tech drawdown, as fears of further war escalation and $100-plus oil fade. Semiconductors are showing relative strength. Risk remains after Trump rejected Iran's proposal to reopen the Strait of Hormuz within seven days, per the WSJ, but ugly weekends have often reversed on a sudden deal, sending oil lower and stocks higher, so positioning heavily around that narrative is risky. x.comÂ
The Nasdaq 100's bounce back near all-time highs on Iran deal hopes gave bulls a false sense of safety, and it is now back at the April levels it belonged at on a risk-weighted basis after ceasefire claims proved false. A 30% rise in 32 trading days on "Iran wants a deal" was never normal enough to hold. x.com x.comÂ
The Nasdaq-100 looks set for a roughly 7% drop over the next month and a half, driven by expected election turmoil. The 10-year Treasury yield is at 5.2% and the dollar index at 101, and the setup rhymes with October 2018. The main risk is a flip higher from here or a move 3% above the previous all-time high; a short-term rip before the decline is possible amid month-end flows. x.com x.com x.com x.comÂ
The Nasdaq 100 is following the expected scenario almost on schedule, but whether a dump comes after it breaks above all-time highs depends on what Iran and Trump do. If the Strait of Hormuz is secured, a dump before the midterms is off the table. x.comÂ
Short dealer gamma could amplify SPY and QQQ selling as liquidity drains. SPY's first long-gamma strike is 745 next week, a possible magnet; QQQ has no long-gamma floor in frame, with vanna near 700. A bottom looks likelier next week than this week, with chop between. When strength returns, probably late October, easing should flood equities sooner than most expect: a strong November, stronger December and a Santa rally, with high beta leading into year-end. Its early hourly turn could reverse. … Show more