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Monday Market Meltdown – Halftime Show

Posted on the 24 January 2022 by Phil's Stock World @philstockworld

As I said on Thurdsday – we were halfway there.  

Monday Market Meltdown – Halftime Show

We were at 15,200 on the Nasdaq Thursday morning and our long-predicted correction target of 15,000 was a certainty but now we're "living on a prayer" that 600 points below 15,000 (14,400) is an overshoot of the rapid correction and not the first leg of the run to 13,500 – where we began Q2 of last year.  

Monday Market Meltdown – Halftime Show
13,200 is actually the 20% correction from 16,500 but the key line for the Nasdaq is 15,000 and 16,500 was 10% up from there and 13,500 is 10% down – that's what the above chart is measuring,  We will, on the whole, be LUCKY if the Nasdaq settles into a range around 15,000 but, in truth, it's likely we overshot the proper range by a mile and 13,500 may be the top of a proper range that centers around 12,000 – which would be a reasonable valuation for the index.  

When you are in a slide like this, you need to consider what is going to change the sentiment and, this week, we have a Fed Meeting on Wednesday but what is the Fed going to say that will help?  They have already said they were looking to tighten so reversing would be a sign of weakness and they already said not until March, so doing nothing won't help either.  I imagine they'll say they will take market conditions into account along with Labor and Inflation and that might calm things down a little, but will it reverse the slide?  

Clearly Congress and the President are not going to break their streak of doing nothing and that leaves us with Earnings Reports, which have not been helping and Economic News – which gets worse and worse as we begin to score the Omicron period.  No, this does not look good at all and, as I said, if we get a swell of sellers hitting the market – there are clearly not enough buyers to support any price level until we do make AT LEAST a 20% correction.   

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