Nasdaq's +50% Surge: What Technicals Say Happens Next
Since the second quarter of this year, the price action for the $S&P 500(.SPX)$ has presented a series of rare bullish signals, unfolding in a manner seen very few times over the last decades. Such events include a breadth thrust signal, two 90% up days on the NYSE, and the V-shaped recovery since April; a phenomenon observed recently in 2020, less recently in 2009, and in a few other years already studied in this Market Intelligence section. Each of these is a significant, rare bullish signal that individually provides statistical references for months of bullish momentum, which is precisely what we have seen.
Today, we will study the $NASDAQ 100(NDX)$ following a major milestone: a 50% bounce from the April 7th bottom. This milestone has historically brought market turbulence, and we will examine the common technical patterns that often follow. Remember: while charts do not repeat exactly, technical patterns do, and as proved with previous events, this roadmap will aid your navigation of the market.
Currently, the Volatility Index $Cboe Volatility Index(VIX)$ is above 20, and the central weekly level of $24,541 for NDX has been visited every day this week, even breached on Tuesday. This mirrors the action in the SPX around its central level of $6,622.
This is a comprehensive study of 11 historical occurrences since 1970 when the $NASDAQ(.IXIC)$ achieved a 50% rally from a bottom without a significant pullback, and what happened immediately afterward. This approach, which combines statistics and technical patterns, has worked very well to anticipate the current rally. Now, at a more mature stage of the bull cycle, we will learn what is likely to happen next. Let’s remember we still have the halo of a weekly bearish engulfing candle in the SPX and NDX, and we have learned that weekly setups remain active until the stock market closes at Friday 4 PM New York Time.
This may be the most important market study for October, providing objective charts, easy to read metrics, and conclusions based on numbers and technicals. This is the same approach used to assess the high odds of a bull market back in April 2025. A must read analysis.
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