Talking Numbers asks……Is Nasdaq set up for a big decline? You don’t have to be a master technician to see that the Nasdaq chart is starting to look troublesome. On Tuesday of this week the Nasdaq tested both it’s 200 day moving average and it’s February 5th low of 3968, bouncing off of both like a cork. Thus far. If the Nasdaq breaks below this very important level, there is very little support until it hits 2,800 or a 33% decline from today’s levels. 

So, will the Nasdaq break the support and head south…way south?

Based on our mathematical and timing work the answer is….. YES. While I am not going to provide you with neither timing nor price targets (available only to our subscribers), I am going to warn you that the bear market of 2014-2017 is just around the corner. When it starts it will very quickly retrace most of the gains accrued over the last 2 years. If you would be interested in learning exactly when this bear market will start (to the day) and its subsequent internal composition, please Click Here.   

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Is Nasdaq Set For A Massive Sell Off? What This Chart Show Will Send Chills Down Your Spine Google

Why the Nasdaq could be setting up for a big decline

Talk about a textbook bounce.

After nearing a 10 percent correction, the Nasdaq Composite touched its 200-day moving average and has since rallied 140-points (and who said technicals don’t matter?).

“There’s a reason why we look at the 200-day on almost every chart here on Talking Numbers, because it works. It’s worked for over 100 years and yesterday was a great example,” said Richard Ross of Auerbach Grayson

So, will the support hold? And is the correction over?

According to Ross, we aren’t out of the woods just yet. “I see some short-term upside, but I think resistance is going to come back into play up around 4,150,” he said, comparing the recent action in the Nasdaq to that of 2011. “Back then, we saw a head and shoulders top, which ultimately lead to a 20 percent decline. Ultimately I think we move significantly lower.”

Gina Sanchez, CNBC Contributor and Founder of Chantico Global agrees that the Nasdaq could head lower, noting the recent decline in momentum stocks such as Netflix and Tesla play a role. “The highest P/E stocks are getting destroyed. And there you have plenty of room to go [down],” she said. “There’s definitely more P/E vulnerability than I think people are owning right now.”