NQ

SPX reversed from the trendline resistance we identified last week as rate-hike expectations picked up, semi earnings ended with a sell-the-news reaction, the market front-ran the next FOMC, and SpaceX joins NDX next week.

Despite the sheer size of yesterday’s drop, I expect this is only the beginning of a much larger correction. My view has not changed: AI is a bubble, it is only a matter of time before it pops, and the oil supply shock will pull the macro backdrop back toward the 1980s.

I have been warning that as price goes vertical, stops must be tightened. Many members of this community are based in Asia, and price action like yesterday’s can wipe out accounts overnight if risk is not managed properly.

Next stop is 7337, followed by my swing target of 7.1K. After that, we either see a steeper drawdown or a violent move higher for the final euphoria. Based on the technicals, I favor the first.

This feels like late March 2000. If you look at the SOX chart, it closely resembles the dot-com terminal rally that ended the tech bull market.

If this analogy is right, NDX could plunge 15-20% within the next 5-10 trading days. Back in spring 2000, SPX was relatively more stable during that move. We are seeing too many similar signals to ignore.

Next support sits around 28.6K, followed by 26K.