- Nasdaq has posted its worst week in over a year, of -5%
- Price trading at the midpoint of the rising diagonal from where price tends to find support
- RSI 30 at oversold levels
In our 09 April note A not-so-big-short 2.0 we reiterated our month long bearish view given the ongoing risks to the downside from stretched technicals, a weakening liquidity impulse and over extended positioning that wasn’t reflecting the ever-decreasing rate cut expectations and brewing geopolitical risks. Since our note, the Nasdaq has posted its worse week in over a year and is down 6 of the past 7 weeks. Although risks still remain to the downside, amid a barrage of disappointing earnings reactions of notable tech stocks of the likes of Netflix and ASML and risks from further CTA selling, price now has reached the midpoint of the ascending channel since the low in Q4 22, a level from which price tends to find support. Given that in the meantime it appears that the conflict may have temporarily deescalated, we think it is worth taking profits a head of a potential rebound over the next week or two, although we maintain our bearish view in the not so short term given the ongoing geopolitical and economic risks.