NASDAQ 100 at a Crossroads: Technical Reversal and Macroeconomic Storms Signal a 25% (from top) Correction Ahead
Technical Indicators: Relative Strength Index (RSI):
The RSI on the monthly timeframe is approaching overbought territory (~70). A reversal from this level would provide further confirmation of a bearish trend developing.
Trendline Analysis:
The price broke out of an ascending channel in mid-2024 but is now testing the upper boundary as support. Failure to hold this level could lead to a sharp decline, as seen during corrections in 2022 and 2020.
Comparison with Historical Corrections: During the 2022 correction, the NASDAQ 100 retraced approximately 35% from its peak. The current overextended rally mirrors past peaks, where correction phases were triggered by rising interest rates or geopolitical events. A 25% retracement from the December 2024 high would align with prior patterns, targeting the 16,500–17,000 range. Final Thoughts: Traders and investors should remain cautious as the NASDAQ 100 faces headwinds from a bearish technical setup and macroeconomic uncertainties. A combination of delayed rate cuts, policy risks under the new administration, and historical correction patterns suggest that the index may face significant downside in the coming months.