Nasdaq 100 Rebound Stops Dead at the 61.8% Line: 2,345 Points, Then a Wall

The US 100 Cash CFD clawed back 2,345 points in six days, rising from the crash low of 26,270.12 to an overnight high of 28,614.70 — and then stalled exactly at the level every retracement trader had circled. The 61.8% Fibonacci retracement of the entire October decline sits at 28,600.86. Price poked above it overnight, failed to hold, and has not printed a single four-hour close above it since. As of this writing, the index trades near 28,200.

The rebound is real, but the rejection is equally real. Both claims deserve scrutiny.

What has the rebound actually repaired?

The chart is no longer the one the crash left behind. The falling trendline drawn across the October 29 and November 4 highs — the line that capped the entire decline — broke on Wednesday morning, when the 06:00 candle closed at 27,999.20 against a line value near 27,797. The line now sits well below price, passing down at 27,429.

The lows tell the same story. They have formed a staircase: 26,270.12, then 26,658.52, then 27,431.20, and now 28,068.70, each one higher than the last. Both floors the crash broke were reclaimed on the way up, and the 27,513.05-to-27,623.42 zone passed its retest on Tuesday, when price dipped through it intraday and closed back inside.

Momentum confirms the shift, with a caveat attached. The RSI crossed above its 50 midline on Monday for the first time since the crash, reached 65.85, and now reads 55.56 against an average of 56.40. Positive, but no longer accelerating.

Takeaway: the damage from the crash is largely repaired on the downside; the upside is where the argument starts.

Why is 28,600 the wall?

This week's highs at 28,583.73 and 28,614.70 have built a shelf with the 61.8% level at 28,600.86 running through its middle. That location is no coincidence. By the textbook, 61.8% is the last retracement a counter-trend bounce is allowed before it stops being a bounce; above it, the move must be treated as a reversal.

The chart stacks a second argument just overhead. The old neckline zone at 28,840.42 to 28,885 contains the November 4 rebound high of 28,857.80, so the sequence of lower highs that has defined this market since October only dies above that band. Beyond it, the 78.6% retracement waits at 29,234.46.

Takeaway: a four-hour close above 28,885, not above 28,600, is what would formally end the downtrend.

Where did today's pullback land?

The morning dip stopped at 28,068.70 and 28,070.70, directly on the upper edge of the 27,926.78-to-28,062.40 band — the zone that was overhead resistance last week and now works as support from above. The 50% retracement at 28,155.83 adds a second layer. A third comes from the steep line under the rebound lows, rising roughly 470 points per day from the November 9 low, passing almost exactly through the same price beneath the current candle.

That is a lot of structure packed inside 100 points. But the analyst's warning is the line's age: it is three days old with only two anchors, and lines that steep get broken in every healthy uptrend without ending it.

Takeaway: support is crowded near 28,070, but the newest piece of it is the least trustworthy.

What are the two triggers?

All signals are judged on four-hour closes.

• Upside: Above 28,614.70, the shelf and the 61.8% fall together, targeting the neckline zone at 28,840.42 to 28,885. A separate close above 28,885 breaks the November 4 swing high and ends the sequence of lower highs; only then does 29,234.46, the 78.6%, come into view.
• Downside: Below 27,926.78, the pullback takes out the band, the 50% level and the rising line in one stroke. Next is 27,710.81, the 38.2%, with the 27,513.05-to-27,623.42 zone behind it.

Between those triggers, the market is ranging between a reclaimed floor and a rejected retracement, and each side has already been tested once today.

What does the macro tape say?

Wall Street closed sharply higher on Wednesday, the Nasdaq up 1.60%, as the midterm election result eased political uncertainty and lifted risk appetite, even as data-centre stocks fell on AI regulation concerns (FxWirePro, November 12).

The other half of the tape complicates the picture. October US inflation printed 0.4% against a 0.3% forecast on Tuesday, traders now treat a December Federal Reserve rate hike as a certainty with roughly an 11% chance of a half-point move (CME FedWatch, via FxWirePro), and the dollar has climbed for a third day to its strongest level since April last year (FxWirePro, November 12).

An equity rebound running into a tightening Fed is a tension that has to resolve, and today's 13:30 UTC US jobless claims are the next scheduled input. The reaction, when it comes, will land directly on the two triggers above.

By Olivia Hart for Business Bearings.

CFDs are complex instruments and carry a high risk of losing money rapidly due to leverage. The commentary above is general market analysis, not investment advice.