Nasdaq 30% off record

This is the largest drawdown from record since financial crisis…

Stocks (3)

Volatility continues to remain extremely high across the financial markets. Investors are trying to make sense of all the central bank rate hikes and quantitative tightening while worrying signs of recession emerges every day, to add to inflation woes. As a result, they have been dumping all sorts of risk assets, seeking refuge in the dollar. Signs of some opportunistic dip buying emerged as European indices bounced off their lows, lifting US futures and cryptos off their worst levels.

Volatility was everywhere. We saw the Swiss franc hit parity with the US dollar for first time since 2019 as the greenback pushed to a new multi-decade high against a basket of foreign currencies. On top of this, the Nasdaq bounced off its worst levels after earlier extending its drawdown from its record high to more than 30%, which was actually higher than even the March-2020-covid peak percentage drawdown. Cryptos plummeted again and WTI hit $107. On a micro level, GameStop was halted for trading after jumping 16% on the session.

On a macro level, we saw weakness in UK data earlier as GDP, manufacturing and industrial production all disappointed, increasing fears that the UK economy is heading for a recession.

At times like now, it is very difficult to navigate the markets and traders are happy to take quick profits, which is why stocks have struggled to sustain any recovery attempts. But the Nasdaq is now 30% off the record highs, which means there is now a chance for a bear market rebound, especially as yields have come down a tad in recent trade. But any sort of a bounce we get, remember that we are now in a bear market and rallies get sold into more often than dips being bought

220512 Nasdaq

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account