(See the video above for Frank's complete chart breakdown.)
Is the Nasdaq-100's recent bounce a sign that the bottom is in? We're going to look at several charts to help answer that question.
First, let's remember how we got here. In September, the NDX broke out from a bullish cup-and-handle pattern, producing a 33,200-upside target. That breakout quickly failed, however, and gave way to a bearish pattern that broke down aggressively two weeks ago.
The decline brought the index relatively close to its 26,350 downside target before the current rebound began.
Zooming out, it's telling to see where the bounce originated. Three important forms of support converged in the 25,000-26,000 area:
- The uptrend line extending from the early 2025 low through the early 2026 low.
- The 38.2% Fibonacci retracement of the entire 2025-2026 rally.
- The former 2025 highs, which represented resistance before becoming a key breakout zone earlier this year.
This confluence of support helped encourage buying after a roughly 15% decline.
For perspective, we also see what larger drawdowns of 20%, 30%, 40%, and 50% would…