The Monthly chart of the Nasdaq
As stated before, another pullback is on the horizon. In the event that this occurs, the MACDs are likely to plummet even lower and may even test or trade below the lows of 2008-2009. Given that the current market trend is neutral, such a development would inevitably trigger a MOAB (Mother of All Buy Signals) unless the pattern undergoes a sudden and dramatic shift.
It's worth noting that several critical requirements have already been met for a MOAB. Furthermore, should the above scenario come to fruition, the likelihood of a FOAB (Father of All Buy Signals) would increase to almost 90%? It can be frustrating to wait for all the pieces to fall into place, but the criteria for both signals are incredibly stringent and cannot be altered.
Exhibiting patience and discipline does not entail enduring an indefinite wait. It involves possessing the forbearance to await the most opportune moment to strike, and then having the discipline necessary to follow through.
At present, we find ourselves amidst the capitulation and despondency stage, akin to the events of 2008. Back then, investors wrongly assumed the market had bottomed in June-July, only to be shocked when it plummeted in September and continued to do so until March 2009, when despondency reached its peak, which proved to be a fantastic long-term entry point.
While the last pdate didn't feature targets for the SPX, let's examine the NDX first, an extension of the Nasdaq. The NDX (Nasdaq 100) could potentially test the range of 13,600 to 13,800, with the possibility of overshooting to 14,160. However, to maintain this outlook's validity, it must not close below 11,960. Should the NDX achieve this, the other indices will likely follow suit, rallying for two to three weeks, with one potentially persisting for up to four weeks.
Moving on to the SPX, it has the potential to trade within the range of 4,200 to 4,250, with the possibility of overshooting to 4,300. However, presently, the NDX, and by extension, the Nasdaq, are the strongest indices. Therefore, if they falter early, the rest of the market is liable to follow suit. Those willing to take risks can utilize instruments such as TQQQ, UDOW, etc., to play the long side, while long-term traders should only nibble if the stocks highlighted in green text pull back to the entry points listed in the market update.
Due to most major indices having surpassed their December 2022 highs, the anticipated correction was postponed until March. The ongoing rally is projected to continue until the end of March, with one index potentially diverging and persisting until April.
