The amazing Nasdaq reversal on February 24 went from from ∼3% down to ∼3% green. That 6% rally is now nearly wiped out.
Where to From Here?
The dotted blue line show weekly support levels at the intraday low on February 24 at the 1300 level, then the 1200 level, and 1100 level.
A look at a monthly chart puts things in better perspective.
Nasdaq Monthly Chart
That chart shows how literally insane the market had rallied.
Thank the Fed.
My most optimistic support level that could hold is the 8000 level. That would be a decline of another 40% from here making a total decline of about 52% from the top.
But I doubt it stops there as it would only take back a mere 2 years of the bull market.
There’s a better chance of support holding at the 6000 level, taking back 5 years of gains.
That would be a decline of 64% from the top, which seems about right for a brutal decline.
And if that level did not hold, and it might not, then consider the 4,000 level, a decline of 76% from the top.
What Looks Cheap Will Get Cheaper
What looks but isn’t cheap, is about to get cheaper. Much cheaper.
Buybacks a huge waste of cash
Flashback Feb 3, 2022
Facebook’s 25% One-Day Crash Shows Competition in Big Tech is Alivehttps://t.co/W4dicpxBUb
— Mike “Mish” Shedlock (@MishGEA) March 7, 2022
Facebook was 242 when I captured that chart. Today 187. People thought it was cheap at 242. It wasn’t. And it isn’t cheap today at 187.
There’s support at 120. And it will likely bounce then. But 80 has a better chance of holding.
Tesla Monthly Chart
Strong EV competition is coming up everywhere and Tesla quality certainly isn’t its strong suit.
Tesla has strong support at 50. Maybe buy and holders get lucky and the decline stops at 500 or 100.
Realistically, expect at least another 50% decline from here.
People Have No Idea What’s Likely Coming
Most People Have No Idea How Much Stocks are Likely to Crash
I repeat my February 23 comments made one day before the big Nasdaq reversal, now nearly wiped out.
Most People Have No Idea How Much Stocks are Likely to Crash
This is not a fire drill. This is a 20-alarm inferno.
Don’t expect the Fed to rescue this mess, but do expect them to try. The beneficiary will not be the US stock market. The beneficiary will be gold.
This post originated on MishTalk.Com.
Thanks for Tuning In!
Please Subscribe to MishTalk Email Alerts.
Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.
If you have subscribed and do not get email alerts, please check your spam folder.
Mish
From the Martens:
“In addition to Wall Street not knowing which global banks and other financial institutions are on the hook to pay out on the Credit Default Swap protection they sold in case of a Russian sovereign debt default (or Russian corporate debt default), there is also approximately $100 billion of Russian sovereign debt (whose default is looking more and more likely) sitting on the balance sheets of foreign banks.”
Which do you think factored more?