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NASDAQ BEARS GET AGGRESSIVE

At Friday's intraday low, the Nasdaq Composite .IXIC was down 8.8% from its October 29 record intraday high. The tech-laden index was able to recover somewhat, to finish at 22,273.08. With this, it ended down 7% from its October 29 record close.

Meanwhile, bears are suddenly not so shy. In fact, on Friday, the ProShares UltraShort QQQ ETF SQQQ.O, which seeks daily investment results, before fees and expenses, that correspond to three times the inverse (-3x) of the daily performance of the Nasdaq 100 index .NDX, saw its volume explode to an all-time high of 97.3 million shares (LSEG Data).

With this, the ratio of SQQQ raw money flow to the ProShares UltraPro QQQ's TQQQ.O raw money flow (TQQQ seeks daily investment results, before fees and expenses, that correspond to three times (3x) the daily performance of the Nasdaq 100), surged to its highest level since April 8.

Of note, April 8 marked the low close in the Nasdaq 100's early 2025 bear market. Thus, it now remains to be seen if Friday's contrarian signal will mark the low of this recent decline.

Turning back to the Composite, on Friday, with its 21,898.29 intraday low, the IXIC briefly dipped below its 100-day moving average $(DMA)$ for the first time since May. The Composite nearly tagged support at the 23.6% Fibonacci retracement of the April to October advance at 21,840.31. The August 13 high was at 21,803.75.

Now on Monday, E-mini Nasdaq 100 futures NQcv1 are suggesting the NDX is poised to add more than 0.8% at the open. Thus, the Nasdaq Composite would also appear set to claw its way higher in early trade.

Initial IXIC resistance is at the November 7 low at 22,562.42. Bulls will want to see the Composite reclaim not only its 50-DMA, which ended Friday around 22,885, but also forge above its November 20 high at 23,147.33 to break the pattern of lower highs and lower lows from the October peak.

In the event that bears maintain their grasp and the Composite closes below 21,803, the focus can then turn to the 38.2% Fibonacci retracement of the April to October advance at 20,491.86 and the rising 200-DMA, which ended Friday around 20,245.

(Terence Gabriel)

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EARLIER ON LIVE MARKETS:

TETHER: WHERE CRYPTO AND GOLD COLLIDE CLICK HERE

A GOOD TIME TO ADD RISK, SAYS HSBC CLICK HERE

BRITISH BUDGET A CLEARING EVENT FOR HOMEBUILDERS, SAY GOLDMAN CLICK HERE

CHEAPER GLP-1 DRUGS COULD PUT PACKAGED FOODS ON A CRASH DIET SAYS PIPER SANDLER CLICK HERE

EYES ON PEACE TALKS CLICK HERE

EUROPE BEFORE THE BELL: CATCH UP AND THEN WHAT? CLICK HERE

MORNING BID: HOLIDAY WEEK COULD BE PRIME TIME FOR YEN INTERVENTION CLICK HERE

(Terence Gabriel is a Reuters market analyst. The views expressed are his own)