The Market’s High-Wire Act
The stock market remains perched at dizzying heights, holding steady amidst a tempest of turbulent price swings.
Tensions on foreign shores, the intricate dance of global and local politics, and the ever-watchful eye of the Federal Reserve and its interest rate decisions have combined to send the markets into a tailspin.
Today, we delve into a historical vista, examining a long-term monthly chart of the illustrious Nasdaq to shed light on some lingering apprehensions.
By applying the age-old Fibonacci method to chart the course from the 2016 trough to the lofty peaks of 2020, we discover that the Nasdaq recently brushed against its 2.618 Fibonacci extension in July.
This juncture of resistance carries weight, particularly when we scrutinize the two extended monthly price wicks from recent times. Both elongated shadows hint at a market caught in a state of flux.
If the annals of history serve as our compass, we witnessed a deja vu of sorts in November/December 2021, when a similar dual pattern emerged – heralding a peak (and subsequently, a harrowing -30% descent).
It is with cautious optimism that I urge vigilance as we steer into the uncharted waters of September.