NASDAQ Today | Test of the Bull Underway

The NASDAQ got hit hard on Friday. The NASDAQ Composite Index was down 114 points (1.8%) and the NASDAQ 100 was down 143 points (2.44%). The NASDAQ has been pushing higher and higher over the last several months leaving the other indices in the dust. But Friday was the biggest downdraft in many months.

My preferred Elliott Wave count on the NASDAQ composite shows 5 complete waves up  for the Trump rally since the election and thereby completing 5 waves up from the February 2016 low.  If this count is to hold, continued selling will need to kick in and trendlines will start to break.

Tired Bull?

This has already started to happen on a couple of the so-called FANG stocks…Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Alphabet a.k.a. Google (GOOGL). All of these stocks got hit with heavy selling on Friday.

Selling on Friday ranged from 3.2% on AMZN to 4.7% on NFLX based on closing prices.  But intraday lows were much lower on several of the stocks. AMZN expereinced what some are calling a flash crash in mid-afternoon when it was briefly down about 8%.  

So the NASDAQ today is testing the bull.  We’ll soon see how tired this bull is. In the video below I review the charts of the NASDAQ Composite and all the FANG stocks.

Stock Market Wisdom

Today’s words of wisdom come from “Reminiscences of a Stock Operator” by Edwin Lefevre written in 1923. This considered to be the thinly disguised biography of Jesse Livermore, a legendary stock trader.

“Another lesson I learned early is that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.  I’ve never forgotten that.”

 

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