Traders who have used this chart in the past said a 17 per cent downside was typical from here and it had never gotten the direction wrong. Last night the Nasdaq tumbled over one per cent as key tech stocks began to breakdown.
This just has to be partly self-fullfilling as traders will all be tracking the same charts. It is also a matter of fundamental analysis too of course. Recent US and Chinese factory data has come in weaker than expected. There is a war brewing in the Ukraine. The Fed effectively just raised global interest rates.
Stock markets rise until they begin to fall and momentum trend spotters would be the first to spot this and they just have. Time to sell too?