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[. Now, in today's video, we need to isolate down where the NASDAQ 100 could go after hitting a new all-time high on this past Friday. And the kicker here is as a technician, we're always looking for where the level might be where we could see a pullback. Now, whether or not it happens, that's kind of a question mark, but a good technician is always prepared and monitoring every level, both technical support and resistance, to try to figure out where the markets could see a pullback or a pop higher.
So, let's dive into the NASDAQ 100 chart here. And we can very clearly see price has rallied significantly here. And again, listen, it's not a vertical move by any stretch. But if you go back to the beginning of September, September 2nd, which was Tuesday, we have a move to the upside on the NASDAQ 100 from the gap down low.
And let's be fair, this that's not really where we were, right? So, the previous day we actually closed here and we rallied up about 5%. So the NASDAQ 100 from the 1st of September is up 5%. But if we look at where we were at the recent low, that's about a 7% move from September 2nd lows. Now the bigger question is where when we zoom out does this chart potentially run into resistance?
And I've been monitoring and analyzing and going through every nuance looking for where this market could go because let's be fair, it seems like the market goes up every single day. And when we get a pullback of 1%, the buy the dippers are very quick to get involved in the market. Then you throw various factors on with good news like Nvidia investing $5 billion into Intel, which by the way for Intel is a very small amount, but it kept the narrative on the chip stocks and the the powers that have kept this rally going.
And that's really the name of the game right now. Can you keep the excitement, the FOMO going amongst investors to where money continues to flow into the markets even in spite of valuations that are now north of the dot bubble? And again, we all know, listen, if you don't think if you're someone out there that thinks we're we're fairly valued in the market, more power to you.
But again, if you look at almost every period in history, we are now at levels on the S&P and the NASDAQ that are almost unparalleled in terms of valuations. All right? Whether it's the Buffett rule again, which looks at GDP versus valuation, uh, for stocks, uh, market cap of stocks or other, it is beyond belief.
But let's go to the charts. As always, it's all about the charts. And what I was doing over the last few hours this morning is just study, study, study. Right? That's what a good technician does. And I came across two converging trend lines that actually were tagged on Friday that I want to just give it to you, right?
And remember folks, there's no guarantees that this is where the market stops. But what I find fascinating about this is that there's very been very few times where two major trend lines have coexisted and crossed at the same point. And it's interesting that Friday's close or highs on the NASDAQ went right into this level.
And so, listen, my job here, the way I look at my job is to always bring information to you guys. You guys get to make your judgments. Is it important? Is it not important? That's totally up to you. But my job is to make you aware. Okay. So, if we take a look here, one of the things I do is I look at major pivot lows.
And what I was monitoring is I said to myself, listen, we had this in 2024, we had this, you know, mid June to early August or mid July into early August selloff that was triggered by something that went on that had to do with Japan. It was the Japan carry trade, right? The yen carry trade. And one of the things that I came across is I talked about this in one of my previous videos is that the Japanese stock market, the NIK intraday on Friday had this big drop partially because the Bank of Japan said, "Hey, we're going to start selling stock that we've been buying and propping up our markets with.
We're going to start selling our stock." But also the fact was that the yen or I should say the Japanese 10-year yield had gone up sizably on that day. Okay. And not only that, but the 10-year yield has a bullish basically a bullish wedge pattern. This is a breakout setup. Eight out of every 10 times this has a big breakout to the upside.
And if this tells us if this were to repeat and the 10-year on the Japanese government 10-year bond were to surge higher, right, the interest rate goes higher, then that could cause problems with the dollar yen, right? The dollar yen could be an issue here. All right, so again, we're looking at a chart here of the 10-year in Japan.
Look at how high it is. And by the way, look at this. I mean this is pretty impressive to see this just continued move up. In fact, you literally could go back 15 years and they are at highs they have not seen in their tenure. And by the way, this is not unprecedented. Most places recently, most countries including the US and we can flip over to the US.
The US since the Fed cut rates has pushed up three days in a row. And if we go to the weekly chart, the weekly is right at technical support. So the question I would have is is the US tenure going to continue up in the near term and that could be very bad as well for US stocks. All right. Now granted my point of showing you what the Nikkay did intraday and what the 10-year in Japan is doing and even even with that what the dollar yen is doing.
And let's go to the USD JPY and take a look at this. Now, what we see here is that essentially the dollar yen's been chopping sideways. But in the past, if we go to 2024, this drop in the dollar yen is what triggered the big market sell-off. And so the key would be is is the dollar yen going to have another big move up or down that's going to shock basically Wall Street and cause ruffles in the bond market and in the currency markets.
And again, just going back to the Nikkay intraday 3% drop before it did recover. These are things that I want to pay attention to because it's very very similar to what we are seeing or what we saw back in 2024 with this decline. And this decline on the NASDAQ 100, by the way, was a decline of 16%. So in in basically 3 weeks, we dropped 16% in the NASDAQ 100.
So, with and I hope you guys see where I'm going with this. What I'm doing is I'm saying, okay, we're starting to see kind of earthquakes or mini tremors beginning in the Japanese markets, in the Japanese, you know, interest rate market, in the bond market. And I'm saying, okay, well, the last time this happened, it caused a freakout in the US markets that had the NASDAQ dropping 16%.
And so I'm drawing that comparison and I'm going to use that low as a significant low to start a trend line because that's what I would consider a major low that has coordination with what could be starting here in the in in Japan. And so we're going to take that line here and we're going to drag it all the way up here.
And I want to show you this. If we bring it through this recent high right here on August 13th and we drag it out, we actually on Friday hit that trend line. Okay. Now, you might say, "Okay, well, all you're doing is connecting this point and this point. Big deal." But I want to show you this. This is these are things these are kind of hidden signals that I look for in charts.
Look at how when we had the liberation day selloff, we came down and look right here. You hit it, you bounced, you hit it again, bounced, and then you broke through. Then you bounced and you gapped up back to that line and then you continued down. So, it's not just connecting the the August 2024 low to the low or the high from August 13th.
That's not the point. The point is watching to see how it behaves when it crosses through. And very clearly there's something there. So again, that gives me credence that this could be something to monitor. Okay, so that's one factor, one trend line, one factor. Now the question is one factor. Okay, it's decent, but it doesn't really give us the hardcore multiffactor setup.
So to do that what we need to do is we need to say okay on this chart is there another trend line that essentially coordinates and what I did was I said okay well let's take this high before that August low. So we took the August low which created this trend line and then we're going to take the high which was at the time the all-time high in the NASDAQ 100 and that's the high before that same selloff.
So we're taking approximately the same time and let's connect it through this high here. All right. Notice how these two highs, there's no other point that goes there, right? So, so it's it's the highest point we could connect this trend line from. And let's extend it out. And lo and behold, look at what we get.
So, exact high, exact low, highest point cuts through here, highest point there, and look at what we get. Okay. So, now listen, and I want to stress this gives us two trend lines. Do two trend lines guarantee anything in technical analysis? The answer is no. Absolutely not. But is this something that will perk my ears up and my my eyebrows go go get raised?
Yeah, I would say so. I want to see, especially coming off qu triple witching. Used to be quad witching, now it's just triple witching, which again is only a quarterly event. I want to see in the coming week how the markets behave here. Maybe the markets continue to push right through. Maybe. Let's find out.
All right. Now, there's something else I want to show you, too, that I find fascinating. If we look at this, where are we approaching now in terms of the April Liberation Day selloff lows, April 7th, right? What are we approaching? Okay, if we take this and do a measurement, let's see how much we are up on the NASDAQ 100.
Look at this. Right now we're up 49 1.5%. Now 49 1.5% there's something to be said for even numbers. Essentially we are knocking on the door of a 50% move since the April lows. So we're talking about April, May, June, July, August, and we're in September. In 6 months, we have a 50% move. Now in technical analysis, remember technical analysis uses uses candlesticks.
You listen, you don't have to use candlesticks. You can use many other you can use line charts whatever you want but the point being is that when you look at a chart you are looking at the psychology of humans right so a green candle means you know rallying up it means people are believing they feel emotionally that a market is undervalued and they're buying it and they're they're thinking it's going higher when some when it falls they're they're fearful and they they believe it's going down.
Okay. So these are the things that we pay attention to. It's psychology. And so if we think about that and we say, okay, what is a 50% gain in a market in 6 months due to the psychology of investors? I would dare say that it it potentially tells us that we could be getting to a point where certain investors will start to say and especially institutions will start to say, "Wow, 50% off of the lows in 6 months." That could be a stopping point as well.
And then again, as if that's all. But wait, folks, there's more. In the technical analysis that I teach, if we go to this bigger time frame, let's get rid of all my lines. There's something to be said for three bar surges. Historically, three bar surges cause pauses or pullbacks when they're to the upside.
After declines, they can be putting in tops, right? And and and and or bottoms, and they start to rally up. In this case, one, two, three. Now, three bar surges are not like this is this would not be considered a part of a three bar surge cuz it's not a big candle. But this, my friends, these are for a weekly chart.
Those are big candles. One, two, three. Okay, for instance, look, one, two, three, and then we bounced. We bottomed out and bounced, right? All right. So, one, two, three, and then we bounced. Now, these wouldn't be considered three bar surges there. They're too small. But the point is, three directional candles, you get kind of a a pause, right?
1 2 3. You got a little pause and then it continued on. And by the way, one two bottomed out on three and that was the bottom right there. All right. So, there's little things like this that get us to pay attention. And these again, this would be the closest thing to a three bar surge we've seen in a long time.
And again, so so essentially what this tells me is that the next week there's a chance for a pause or a pullback just because of that three bar surge. Then we flip over to the monthly chart. Now, there's something called a time count. A time count is something that that I've discovered years and years ago and it's a powerful um when you're looking in at charts actually if you're looking at any religious text seven is the most common number that you find in any religious text doesn't matter what religion believe it or not and I'm I'm religion agnostic in this in that it literally you will see you will come across seven days in a week right I mean there's so many things that you know the seven deadly sins the you know you just go over and over and over again and you'll see and when you and if you someone that reads religious texts whether you're religious or not it's it's just great to understand but you'll find you'll be like holy cow there's another mention of a seven and there's seven and then there's seven and then there's seven and in markets sevens have power and so what we know is here we have the low from April 1 2 3 4 5 6 we're on our sixth candle sevens tend to be the point where you see a reversal in the trend or a pullback.
And so again, these little things and listen, we're not at the end of the month yet, so we have to see how it behaves. If we get a little pullback this next week, it is the end of the quarter, so there might be some window dressing, obviously, stuff like that. But these little things definitely kind of peique my interest in regards to um the NASDAQ 100, the 7 count, the three bar surge.
Then we flip back. We looked at those those trend lines that were merging. Um all of these factors are kind of coming together. And then lastly, again, just to reiterate, I'm really I mean again, I haven't paid this much attention to the Nikkeay and the yields in Japan, nor the currency markets, the dollar yen.
But I am starting to pay a lot closer attention to the dollar yen, the Nikkay and obviously the the interest rates in Japan and really the US interest rates which have now gone up for multiple days following the Fed decision to cut rates. And always remember guys, the Fed controls the short end, not the long end.
Short end, by the way, means like the three-month, the very shortterm rates get controlled by the Fed. um the long-term the 10, 20, 30year yields or bonds, those are independent. The market controls those. All right, guys. Again, you know, this is what my bread and butter is, and this is what I love to do.
If the markets continue to go up, I say, "Okay, they're going up and they could continue to go up." But where what kind of what pieces of the puzzle might coordinate where we are or nearing where we are that could give me insight into something on the horizon? Because again, everyone loves following the trend, but the problem is people follow the trend and tend to get extra long at the end of moves and then they go broke when the reversal happens.
So yes, the trend is your friend, but the the the old adage is the trend is your friend to the to the end until the end and then people tend to get wiped out. And so my goal is always to say, okay, well, the trend is grinding higher, but at what point could we see that flush out where the markets say, okay, we've got enough people, you know, margined out now, let's flush it in the opposite direction.
And that goes both ways. Think about in Liberation Day selloff, right? People were so bearish, panicking at those lows in April and what happened? Markets bottomed and have gone ups ever since. Incredible stuff. Markets are amazing in that way. All right, guys. My work, my thought process to you guys.
You guys put in the time to watch this, then by all means, I will lay it all out on the table for you guys. Have a great weekend. Thanks so much. Talk to you soon. Take care.
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