• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Will the QQQ Sell Off in January? Here’s How It Could Happen.
Stock

Will the QQQ Sell Off in January? Here’s How It Could Happen.

by December 13, 2024
by December 13, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

In recent interviews for my Market Misbehavior podcast, I’ve asked technical analysts including Frank Cappelleri, TG Watkins, and Tom Bowley what they see happening as we wrap a very successful 2024.  With the Nasdaq 100 logging about a 30% gain for 2024, it’s hard to imagine that incredible bullish continuing into 2025.  But it is definitely possible!

Q4 has seen the return of the dominance of the Magnificent 7 stocks, with charts like META breaking to new all-time highs.  Despite weaker market breadth conditions all around, indexes like the Nasdaq 100 have remained quite strong driven by the strength in mega cap growth.

While Q4 of an election year tends to be quite strong, once investors are able to gain at least some clarity of what to expect in terms of policy changes in the years to come, Q1 of a post-election year tends to have mixed results!

Today, we’ll lay out four potential outcomes for the Nasdaq 100.  As I share each of these four future paths, I’ll describe the market conditions that would likely be involved, and I’ll also share my estimated probability for each scenario.  

By the way, we conducted a similar exercise for the Nasdaq 100 back in September, and you won’t believe which scenario actually played out!

And remember, the point of this exercise is threefold:

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.Decide which scenario you feel is most likely, and why you think that’s the case. Don’t forget to drop me a comment and let me know your vote!Think 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?

Let’s start with the most optimistic scenario, with the QQQ achieving a new all-time high over the next six to eight weeks.

Option 1: The Very Bullish Scenario

For the most bullish scenario, I basically assumed that the uptrend we’ve observed since September continues at a very similar pace.  That would mean the QQQ could reach up to around $560 or so by the end of January.  For that to happen, we’d need charts like NVDA to resume their uptrends, charts like META to hold their recent breakout levels, and all the other sectors to resume a more bullish configuration!

Dave’s Vote: 10%

Option 2: The Mildly Bullish Scenario

What if the Magnificent 7 names slow down a bit, and even though other sectors like financials and industrials begin to outperform, it’s just not enough to push the benchmarks much higher?  Scenario 2 would mean a slower pace to the recent advance, but the bullish phase would still keep the QQQ this week’s close around $530.  Perhaps the Fed meeting next week suggests a more measured pace to rate cuts in early 2025, and investors grow a bit more skeptical that this market euphoria will continue.

Dave’s vote: 20%

Option 3: The Mildly Bearish Scenario

The bearish scenarios basically assume that this week’s high is about it, and even though we may drift a bit higher into year end, January 2025 looks a lot like January 2022.  The mildly bearish Scenario means we pull back a bit, but not enough to push the Nasdaq 100 below “big round number” support at $500.

There are a number of ways this could play out, but perhaps the first run of economic data in January, combined with a disappointing beginning to earnings season, makes us all realize that the euphoria of 2024 is now in the rearview mirror!

Dave’s vote: 60%

Option 4: The Super Bearish Scenario

You always need a super bearish scenario, if only to remember that it’s always a possibility regardless of whatever’s happened in recent months!  Scenario 4 would mean about a 15% decline in January, which would actually be a fairly reasonable corrective move based on market history.

If economic data shows that inflation is not remaining in the 2-3% range, or if earnings season is punctuated by a series of high profile misses, or if the Magnificent 7 all begin breaking down, this super bearish scenario could become a reality in short order.

Dave’s vote: 10%

What probabilities would you assign to each of these four scenarios?  Check out the video below, and then drop a comment with which scenario you select and why!

RR#6,

Dave

PS- Ready to upgrade your investment process?  Check out my free behavioral investing course!

David Keller, CMT

Chief Market Strategist

StockCharts.com

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice.  The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.  

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.

You Might Also Like
  • Sector Spotlight: Dominant Trend for Stocks Still UP
  • High-Yield Opportunities for an Uncertain Market
  • Run Your Stock Portfolio Like a Pro Sports Team
  • S&P 500 Tempest in a Teapot
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Pumping the Brakes on Ferrari (RACE)
next post
Identifying GREAT Trades and Looking Ahead to 2025 Using RRG Charts

You may also like

Why the Stock Market is SO Confusing Right Now

September 24, 2024

Generate Consistent Income with These Options Strategies

May 21, 2025

Top Ten Charts to Watch in November 2023

November 3, 2023

NVDA at a Crossroads: Decoding the Signals From Atop a...

March 30, 2023

Latest Interview

January 4, 2024

The Case for Small-Caps as Major Indexes Test Overbought Conditions

November 17, 2023

Mish’s Daily: Should the Market Worry About Regional Banks Sector?

January 18, 2023

In this Market, Think Supply and Demand; Is Apple a...

September 10, 2023

Three Charts to Track Impending Doom

January 6, 2024

MEM TV: Capitulation Signals for a Market BOTTOM

April 20, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025
    • U.S. foreign tax bill sends jitters across Wall Street

      May 30, 2025
    • Amazon taps Xbox co-founder to lead new team developing ‘breakthrough’ consumer products

      May 30, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,765 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,472 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,451 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,432 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,308 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right...

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    The Secret Sauce! Expert Investors Use...

    January 13, 2024

    Quit Trading Without This! Track Entries...

    May 5, 2023

    Perspective And History Tell Us To...

    January 14, 2024
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here