12 Jun 2020 ● 07:21 AM
Nasdaq 100 came very close to the top line of this chart which I published in April. Sentiment 2 days ago was 92% bullish for the index and is now at 76% and for the S&P from 90% to 64%. This drop gets us out of the near term over bought situation. But to make a bigger call for a top I need some more evidence of clear follow up to the recent decline.
The second chart shows that big one to two day declines in the Nasdaq have become a common feature of the recent rally in the index. 3-5% declines were seen many times followed by a recovery soon after ward. Each one was a panic driven by some reason from China to data to FED to Covid. So we have to look out if this is a repeat of the same.