Please refer to these prior posts for additional context:
- NASDAQ: Updated Guidance and Forecast – May 2025
- Nasdaq Outlook Through Early June – Employment Data as a Market Driver
The Nasdaq this past week printed a bearish engulfing candle. These can be harbingers of volatility ahead and indicate a pause in rallies when located at local market tops (see chart below).
Although EquiPredict Analytics is not a technical analysis (TA) service, it is prudent to combine forecasts with known TA methodologies to improve risk management techniques.
When using the rate of change of payroll data (chart below), additional supporting evidence points to potential weakness into June.
NOTE: Due to overall market bullishness, there is always the potential for price action in the Nasdaq to attempt to break through its recent high (short squeeze).
In summation, it is wise to consider stricter risk management and, for more active market participants, to raise cash and hedges at this time.