Shorting Nasdaq Part 2: Why the Correction Might Be Coming

I'm considering another short on the index. Here's the breakdown:

• Geopolitical Risk: The threat of World War 3 casts a shadow of uncertainty over markets. In times of crisis, investors tend to sell stocks and seek the safety of assets like gold. Tech stocks usually bear the brunt of the selloff.
  
• Overheated Tech: The tech sector has been thriving, but valuations in some areas might be getting stretched. Markets need healthy corrections for long-term strength.
  
• Technical Breakdown: Yesterday's closure below the established range is a bearish signal. This suggests sellers might be seizing control.
  

Trading Strategy

I'm keeping a close eye on these potential entry points:

• Retest of Range: If the Nasdaq bounces back to retest the bottom of the range, I might enter a short position.
  
• Break of Today's Low: A decisive break below today's low would confirm the downward momentum and provide another strong shorting opportunity.
  
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Disclaimer: This is not financial advice. Always do your own research before making investment decisions.

Comment:

Well well well... what do we have here? Looks like a beautiful retest and fall down just as expected.

Almost 2R done. I'll be booking 50% and moving SL to cost, making this a risk free trade.

Always manage risk according to your capacity.