It's been a rough couple of weeks.
The Nasdaq once again hit the 13,500 line last night, after hearing a hawkish Fed conference from Chairman Powell, which is exactly what we predicted would happen on Monday, when I said:
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.
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?
We have, in fact, tested the 13,700 line on Monday and, as of last night,…
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