The NASDAQ index is experiencing a downturn, currently down 347 points or 1.60%, falling below its 100-hour moving average at 21,331.91. This breach shifts the short-term trend to the downside, heightening concerns about potential further selling.<\/p>\n
Historically, a similar break below the 100-hour average on August 1 led to a decline towards the 200-hour moving average, which now stands at 21,119.99. Breaking under this next level could increase the negative bias, suggesting further downward momentum.<\/p>\n
Market participants are keenly observing whether the index will close back above the 100-hour moving average or continue to lean towards the 200-hour moving average in the upcoming sessions. Attention is also on the Jackson Hole Summit, where Fed Chair Powell will discuss policy outlook, affecting market sentiment.<\/p>\n
Technically, the 200-hour moving average is the initial critical support. Further decline could lead to the 38.2% retracement level at 20,864.09 and eventually to the 50% midpoint near 20,573.83. Reaching these levels would represent a drop of around 4.25% from the August 12 peak, indicating potential for more extensive corrective action if selling persists.<\/p>\n
With the NASDAQ breaking below its 100-hour moving average, we see a clear warning sign. This shifts the immediate trend to a more bearish outlook. The key for us is whether sellers can hold the price below 21,331 into the close.<\/p>\n
This move is backed by rising market fear. The VIX, a measure of expected volatility, has jumped over 25% this week to 19.5, signaling growing anxiety among traders. This is the kind of environment where downward moves can accelerate quickly.<\/p>\n
We are now watching the 200-hour moving average at 21,119.99 as the next major support. Looking back to the start of the month on August 1, 2025, we saw a similar break lead directly to a test of this level. History suggests this is the most likely next target for sellers.<\/p>\n
For those trading options, this is a moment to consider protective puts on indices like the QQQ. The CBOE put\/call ratio has already climbed to 1.15, showing that more traders are buying puts than calls in anticipation of further declines. This defensive positioning is becoming a popular strategy.<\/p>\n
All eyes are on Fed Chair Powell\u2019s speech at the Jackson Hole Summit this Friday. Market pricing, according to the CME FedWatch Tool, shows an 83% probability of a rate cut at the next meeting. However, with the latest CPI report coming in hotter than expected at 3.4%, any hawkish language from Powell could easily spook the market.<\/p>\n
Given the binary risk of the speech, strategies that benefit from volatility, such as a long straddle, could be effective. This allows a trader to profit from a large price swing in either direction following Powell’s remarks. The uncertainty makes picking a direction ahead of Friday a risky bet.<\/p>\n
If the 200-hour moving average fails to hold, our next focus will be the support zone near 20,864. A deeper slide could take us toward the 20,573 level, which would represent a 4.25% correction from the highs we saw on August 12. These are the key levels to plan trades around.<\/p>\n
We also have to consider the seasonal headwinds approaching. Historically, September is the weakest month of the year for stocks, a pattern often called the “September Effect.” This historical tendency adds weight to the current bearish technical signals we are seeing.<\/p>\n
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