July 28, 2020, 12:49 pm EDT
Watch Out Nasdaq Index
Compared to Dow Jones and S&P 500, Nasdaq might be easier to see upcoming trend changes when it happens. It is because Nasdaq is able to maintain the uptrend within a narrow channel as shown for over 4 months since March. June 11 broke the trend but Nasdaq was able to recover it quickly with a mild angle. Consequently, Nasdaq keeps up the uptrend.
However, sector rotation took place recently where high flying mega tech undergoing profit-taking like AAPL, AMZN, MSFT. GOOGL, FB, NFLX since early July. Thus watching Nasdaq index provides early signals for confirmation on direction change. Furthermore, if Nasdaq break down occurs that carries strong downside momentum, then other indexes or the entire market could follow it to downside.
First level of potential rebound and support is about 9400 (green dash line) .