Correction Watch: Nasdaq May Break Support
Daily Nasdaq: The Nasdaq has fallen 8% off its highs from 16 February (10% is generally considered a correction, 20% a bear market). Today's -2.7% decline on higher volume broke below the 50-EMA and settled near the 13,000 level; this level was tested 3-4 times since January. RSI-20 also slid under the 50 level into the weak zone. If the Nasdaq breaks below the 13,000 level (new swing low), we would likely enter a correction. The more times price has tested a level, the greater the significance if broken to downside, especially if down volume is heavy. At the same time, a drop under the level could be a shakeout if price violates the level, but quickly reverses back up through the line of support.