LIVE MARKETS-Nasdaq composite: Is there an off ramp on the correction highway?

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NASDAQ COMPOSITE: IS THERE AN OFF RAMP ON THE CORRECTION HIGHWAY?

During Tuesday's and Wednesday's sessions, the Nasdaq Composite .IXIC briefly fell into correction territory. However, a significant support level on the weekly charts was able to provide a detour, allowing the composite to u-turn back to the upside:

On Tuesday, the IXIC hit an intraday low of 17,956.60, putting it down 11% from its 20,173.89 December 16 record closing high. (18,156.501 is a 10% correction from its record close).

On Wednesday, the IXIC fell to an intraday low of 18,144.73, putting it down 10.1% from its record close.

With its weakness over the past two days, the composite flirted with its rising 50-week moving average (WMA), which is now around 18,070.

Of note, in the wake of the IXIC's late-2021 peak, the 50-WMA, once broken, capped strength into the market's 2022 bear-market lows. And since it was reclaimed on a weekly closing basis in March 2023, the 50-WMA acted as a launching pad for a resumption of Nasdaq strength that began in October 2023 and August 2024.

With the tests of its 50-WMA, the composite has been able to stabilize. It finished Tuesday at 18,285.16, and then rallied Wednesday, ending at 18,552.73, putting it down 8.04% from its record close.

That said, with e-mini Nasdaq 100 futures NQcv1 tumbling more than 1.5% in premarket trade on Thursday, the composite appears poised to come under heavy downside pressure at the open, and once again threaten correction territory.

The 50-WMA has been resilient, but on a break of Tuesday's low, the channel support line from the late-2022 low, which is now around 17,650, may be the next magnet. It's now around 12.5% below the record close.

On an upward reversal, there is resistance in the 18,671-18,831 area.

(Terence Gabriel)

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