As you can see on the following weekly chart, no major damage was done in technical terms. On August 5, the market initially went downhill rapidly, but the recovery followed just as quickly. The sequence of rising highs and rising lows was not violated and the upward trend is therefore still fully intact. The correction ended exactly at the upward trend line in combination with the weekly EMA 50 (green).<\/p>\n\n\n\n Nasdaq 100 Index Wochenchart<\/p>\n\n\n\n In the meantime, the old support area at 18,400 points has also been recaptured, as has the weekly EMA 20. On the daily chart (below) you can see that the index was also able to rise above all important moving averages on a daily basis. Although the EMA 200 (red) was briefly breached at the opening price on August 5, the Nasdaq 100 also closed above the 200 EMA on this day and was thus able to defend it.<\/p>\n\n\n\n Nasdaq 100 Index daily chart<\/p>\n\n\n\n After the rapid upward movement of the last two weeks, it is not impossible that the Nasdaq 100 will directly tackle the all-time highs, but it appears to be a little overstretched on the upside, at least in the short term. In addition, the next resistance levels are at 19,500 points and around 20,000 points. A short-term setback would therefore not be unlikely and would also open up the possibility of renewed bullish positioning.<\/p>\n\n\n\n Should the Nasdaq 100 correct a few points this week, the next area of support would be the daily EMA 20 (purple) and the daily EMA 50 (green) at around 19,100 points. There is also another horizontal support area at around 18,800 points.<\/p>\n\n\n\n An analysis of the most important market breadth indicators confirms that we are currently still seeing an apparently healthy bull market.<\/p>\n\n\n\n When analyzing the various market sectors, it can be seen that the offensive sectors led the way in the past two weeks, while the defensive sectors also rose but performed somewhat weaker. In the previous weeks, the picture was exactly the opposite: the offensive sectors were comparatively weak, while the defensive sectors showed relative strength. A typical pattern for a correction. The renewed bullish sector rotation is a signal of growing confidence and risk appetite among investors.<\/p>\n\n\n\n The technology sector has been by far the strongest market sector in the last two weeks. This can also be seen by looking at the ratio chart between the Nasdaq 100 and the S&P 500, which you can display by dividing the Nasdaq 100 by the S&P 500, or as in the following chart: QQQ:SPY.<\/p>\n\n\n\n Relation chart QQQ:SPY (Nasdaq 100 \/ S&P 500)<\/p>\n\n\n\n The relationship line rose until July 10, exactly the day on which the Nasdaq 100 reached its last all-time high and subsequently initiated the correction. The S&P 500 followed a few days later. Since August 8, we have seen a rising relationship line again, signaling an outperformance of the Nasdaq 100.<\/p>\n\n\n\n One factor that should be taken into account, however, is seasonality. In late summer, the stock markets tend to be susceptible to a correction. After February, September was the second weakest month for the Nasdaq 100 in the last 20 years. The technology index only managed to rise 47 % of the time. However, October and especially November are again characterized by seasonal strength. A seasonal low is often formed in October, which can signal the start of a rally into December. Bullish signals after a possible correction in September can therefore offer a good opportunity for long trades in the Nasdaq 100 or in technology stocks.<\/p>\n\n\n\n Percentage of months with rising prices in the Nasdaq 100 (last 20 years)<\/p>\n\n\n\n![\"\"](\"https:\/\/www.captrader.com\/wp-content\/uploads\/2024\/08\/word-image-54042-1.png\")
<\/figure>\n\n\n\n![\"\"](\"https:\/\/www.captrader.com\/wp-content\/uploads\/2024\/08\/word-image-54042-2.png\")
<\/figure>\n\n\n\n<\/a>Market breadth confirms upward trend<\/h2>\n\n\n\n
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<\/a>Technology sector leads the way<\/h2>\n\n\n\n
![\"\"](\"https:\/\/www.captrader.com\/wp-content\/uploads\/2024\/08\/word-image-54042-3.png\")
<\/figure>\n\n\n\n<\/a>Seasonality advises caution in September<\/h2>\n\n\n\n
![\"\"](\"https:\/\/www.captrader.com\/wp-content\/uploads\/2024\/08\/word-image-54042-4.png\")
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