- By Nikki Yu Gillo, CMT Investopedia is partnering with CMT Association on this newsletter
- The contents of this newsletter are for informational and educational purposes only, however, and do not […]
| Investopedia is partnering with CMT Association on this newsletter. The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice. The guest authors, which may sell research to investors, and may trade or hold positions in securities mentioned herein do not represent the views of CMT Association or Investopedia. Please consult a financial advisor for investment recommendations and services. |
Estimating Potential Correction Zones
The bull market continues and usually retrace 10-20% of its impulse move. In the case of the Nasdaq100 or the QQQ which has surged from its April 420 lows to the current 640 highs, we expect a minor supportive bounce at 580 to coincide with a lot of dip buyers. This is also the 100 day moving average. Shallow pullback zones suggest lack of strong selling pressure negating bearish discussions of a popping of an AI bubble. Instead the market needs corrections to reset overheated technical conditions to keep the bull market running healthy.
MAG7 Continue Trading on Upper Ranges
Although headlines discuss the expensive valuations of the markets, the sentiment doesn’t show a really weak markets and the continuous wall of worry can only be validated if we take a deeper correction at least to the 100 day moving averages similar to July and August 2024 or during the deeper selloffs in April 2025. At most, we would expect corrections to find supportive bounces especially at 10% drawdowns from current prices. Thus, shallow and muted corrections are unlikely to trigger a strong panic selling wave given the advances made.
Rotation towards International Equities Continue Amidst Lofty US Valuations
The rotation toward international equities is accelerating even in the latter end of 2025, driven by discounted valuations abroad and stretched pricing in U.S. mega-cap growth stocks rotating to international equities as shown on the continued strength of IEUR which is a Europe ETF. There has been no conclusive evidence of real panic selling but a rotation.
Nikki Yu Gillo, CMT is a Philippine Chapter Chair of the CMT Association. She has over 20 years of experience working in Wealth Securities Inc. and runs a private investor community called Awesome10X. She can be reached at [email protected]
Shared content and posted charts are intended to be used for informational and educational purposes only. CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. CMT Association does not accept liability for any financial loss or damage our audience may incur.
