Nasdaq- Weekly - Looks over bought• On the weekly US 100 chart, the recent candle structure shows a clear loss of momentum near all-time highs. The shooting-star type candle near 26,000 indicates rejection from higher levels, meaning supply is emerging where demand earlier dominated.
• After this rejection, weekly price action has started forming lower highs and lower lows. This is typically the first technical signal that the market is shifting from trending to corrective mode, not a trend reversal but a pause or reset.
• The marked weekly support around 23,850 is crucial. If this zone fails to hold on a closing basis, historical price behaviour suggests a deeper move towards the rising long-term trendline, which mathematically aligns with a 15–20 percent correction from the top.
• In the previous similar setup during early 2025, US 100 corrected around 17–20 percent before resuming its broader uptrend. The structure, momentum loss and distance from the trendline then are very similar to what we see now.
• Weekly RSI has slipped below the 60 zone after staying elevated for a long period. In strong bull phases, RSI holds above 60; when it breaks below, markets usually enter a corrective or consolidation phase. RSI moving towards the 40–45 zone would be consistent with a healthy bull-market correction.
• Volume during the recent upside move has not expanded meaningfully, suggesting lack of aggressive fresh buying near highs. Corrections often begin quietly when strong hands distribute and weak hands are still optimistic.
• From a valuation angle, the Nasdaq 100 trailing P/E is currently around the mid-30s.
– 1-year perspective: valuations are higher than average, indicating mild over-valuation.
– 2-year perspective: P/E is still above its median, suggesting limited valuation comfort.
– 3-year perspective: valuations are slightly stretched but not extreme.
– 5-year perspective: current P/E is above long-term averages, but far below bubble-era extremes.
Overall, the index is not cheap, not in bubble territory either, but priced high enough that corrections tend to feel sharp.
• Combining price structure, momentum and valuation, a 15–20 percent correction looks technically reasonable and historically normal within a long-term uptrend.
• This observation is purely for learning and market understanding. There is no intention to spread fear or negativity in the community. Corrections are part of healthy markets and help reset excess optimism.
• Emotion management during such phases is critical. Avoid over-watching charts, reduce position size if volatility affects decision-making, stick to predefined risk rules, and remember that corrections are temporary phases, not permanent damage. Markets reward patience far more than panic.
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