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Can The Recent Nasdaq Low Become The New Price Support Bottom Level?

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The Nasdaq is pretty much in the same situation to start this week as it was last Monday before the market opened.

On Friday, the Nasdaq rallied to give hopes that the current stock market drop is over, but it did the same thing again the Friday before that on February 28.

Now the Nasdaq is below its 150 and 200-day moving averages.

I’m hopeful that it will make a sideways bottoming formation off of the 17,800 level over the course of the next few weeks, but this some sloppy action.

It poised to gap down this morning so it must rally today to maintain this support level, if not selling is likely to intensify this week.

There are other things doing better than the US stock market now.

Gold being one of them, but there is more to the global financial markets than just the US stock market or precious metals too, as I wrote about in yesterday’s WSW Pro update.

The dollar is trending down, which makes it so that when Americans invest in foreign markets they benefit now.

-Mike

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And…..

If this current stock market decline doesn’t end here then it is likely to end with a panic selling washout that causes the VIX to spike 20% in one day. This last happened in December, and then before that in August, which marked the biggest one day move in the VIX ever. If you can remember it was associated with the “yen carry trade” making a sudden move.

VIX spikes do make for good buying opportunities, so if it happens this week that’s something to think about.

-Mike

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