The Nasdaq-100’s recent bounce originated in a major support area between 25,000 and 26,000, where an uptrend line, the 38.2% Fibonacci retracement of the 2025-2026 rally, and the former 2025 highs converged. After a decline of roughly 15%, this confluence of support encouraged buying as the index approached its 26,350 downside target before rebounding. Historically, drawdowns of 10% to 25% have often been followed by recoveries, but 2022, when the index fell nearly 36% over about 10 months, serves as a reminder of a more dangerous scenario. Frank Cappelleri says the extent of the next move will determine whether this is a routine correction or the early stages of a longer bear market. A rally that fails to reclaim previous highs would establish a significant lower high, while another wave of strong selling would revive downside momentum.
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