{"id":9549,"date":"2024-09-14T00:03:22","date_gmt":"2024-09-14T00:03:22","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2024\/09\/14\/heres-my-most-likely-scenario-for-qqq\/"},"modified":"2024-09-14T00:03:22","modified_gmt":"2024-09-14T00:03:22","slug":"heres-my-most-likely-scenario-for-qqq","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2024\/09\/14\/heres-my-most-likely-scenario-for-qqq\/","title":{"rendered":"Here\u2019s My Most-Likely Scenario for QQQ"},"content":{"rendered":"
\n

While the S&P 500 finished the week once again testing new all-time highs around 5650, the Nasdaq 100 remains rangebound in a symmetrical triangle or \u201ccoil\u201d pattern.\u00a0 While this pattern does not necessarily suggest a potential next move for the QQQ, it did lead me to think about four different scenarios that could play out over the next six to eight weeks.<\/p>\n

The chart of the QQQ looks a lot like the chart of Nvidia (NVDA), with a clear consolidation pattern of lower highs and higher lows. Other leading growth names like Meta Platforms (META) have failed to signal an upside breakout to give an \u201call clear\u201d signal for the bulls.\u00a0And defensive sectors continue to thrive, even though the S&P 500 finished in the green every day this week.<\/p>\n

Today, we\u2019ll lay out four potential outcomes for the Nasdaq 100.\u00a0As I share each of these four future paths, I\u2019ll describe the market conditions that would likely be involved, and I\u2019ll also share my estimated probability for each scenario.<\/p>\n

By the way, we conducted a similar exercise for the Nasdaq 100 back in June, and you won\u2019t believe <\/em>which scenario actually played out<\/em><\/a>!<\/em><\/p>\n

And remember, the point of this exercise is threefold:<\/p>\n

Consider all four potential future paths for the index, think about what would cause each scenario to unfold in terms of the macro drivers, and review what signals\/patterns\/indicators would confirm the scenario.
\nDecide which scenario you feel is most likely, and why you think that\u2019s the case. Don\u2019t forget to drop me a comment on my channels and let me know your vote!
\nThink about how each of the four scenarios would impact your current portfolio. How would you manage risk in each case? How and when would you take action to adapt to this new reality?<\/p>\n

Let\u2019s start with the most optimistic scenario, with the QQQ achieving a new all-time high over the next six to eight weeks.<\/p>\n

Option 1: The Very Bullish Scenario<\/h2>\n

What if NVDA breaks out to the upside, META finally pops above $550, and the rest of the Magnificent 7 stocks go right back to a leadership role?\u00a0That would certainly drive the Nasdaq and the S&P 500 to their own new highs in the next month or so.\u00a0If Powell\u2019s press conference next week renews investor optimism and the market prices in a perfect soft landing for the economy, we could perhaps see this play out.<\/p>\n

Dave\u2019s Vote: 10%<\/em><\/p>\n

Option 2: The Mildly Bullish Scenario<\/h2>\n

If the Mag7 names continue to struggle and fail to breakout, but other sectors like financials and industrials surge higher, we could get a more mildly bullish rally here.\u00a0That would mean the QQQ remains below its 2024 high, but stockpickers rejoice as plenty of opportunities appear outside of the growth sectors.<\/p>\n

Dave\u2019s vote: 30%<\/em><\/p>\n

Option 3: The Mildly Bearish Scenario<\/h2>\n

What if the Fed meeting does not go as well next week, and investors start thinking recession again?\u00a0Defensive sectors have certainly been showing strength in recent months, and it feels like it would not take much to reverse the signs of optimism I\u2019ve observed over the last week. Bonds outperform stocks as investors get defensive, and suddenly we\u2019re all hoping for an October rally to overcome the bearish sentiment.<\/p>\n

Dave\u2019s vote: 45%<\/em><\/p>\n

Option 4: The Super Bearish Scenario<\/h2>\n

You always need a doomsday scenario, and this last option would involve a big time \u201crisk off\u201d move for stocks.\u00a0Growth stocks rotate lower, and risk-off plays like gold shine brightest as the QQQ retests the August low around $425.\u00a0Perhaps Powell fails to boost investors\u2019 confidence and the \u201cgoldilocks scenario\u201d for the economy seems like a distant memory.<\/p>\n

Dave\u2019s vote: 15%<\/em><\/p>\n<\/p>\n

What probabilities would you assign to each of these four scenarios?\u00a0Check out the video below, and then drop a comment with which scenario you select and why!<\/p>\n

<\/div>\n

RR#6,<\/p>\n

Dave<\/p>\n

P.S.<\/strong> Ready to upgrade your investment process?\u00a0Check out my free behavioral investing course<\/a>!<\/span><\/p>\n

David Keller, CMT<\/strong><\/p>\n

Chief Market Strategist<\/p>\n

StockCharts.com<\/p>\n

Disclaimer: <\/em><\/strong>This blog is for educational purposes only and should not be construed as financial advice.\u00a0The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.<\/em><\/p>\n

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

While the S&P 500 finished the week once again testing new all-time highs around 5650, the Nasdaq 100 remains rangebound in a symmetrical triangle or \u201ccoil\u201d pattern.\u00a0 While this pattern does not necessarily suggest a potential next move for the QQQ, it did lead me to think about four different scenarios that could play out […]<\/p>\n","protected":false},"author":0,"featured_media":9550,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-9549","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/9549","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=9549"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/9549\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/9550"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=9549"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=9549"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=9549"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}