Elsewhere In The Market
The Emini Nasdaq has broken the neckline of a two-month head and shoulders pattern at around 24,850. A confirmed break below this level was deemed to have a greater than 50% chance and serves as a medium-term sell signal.
An additional break below 24,600 would prompt another sell signal, potentially leading to a buying opportunity at 24,200/24,000. Long positions should set stops below 23,850, while short positions should set stops above 25,100, given the strong resistance at 24,850/24,950.
Elsewhere, EUR/USD trades around 1.1600 and GBP/USD remains near 1.3150 during European trading. Gold is near a one-week low, and Bitcoin has dropped below $90,000. The S&P 500 continued its retracement on the previous trading day, while Solana saw a 2% increase.
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Market Sentiment And Economic Data
Stocks look set for a significant drop as we head into the final weeks of 2025. We’ve seen the Emini Nasdaq break below a critical support level around 24850, completing a bearish pattern that has been forming for two months. This is an important medium-term sell signal that suggests further downside is likely.
This technical breakdown is supported by worsening economic data, as last week’s October CPI report came in hotter than expected at 3.9%, renewing inflation fears. The latest U.S. jobless claims also ticked up to 245,000, their highest level in three months, suggesting the labor market is finally starting to cool. This combination of stubborn inflation and slowing growth is weighing heavily on investor sentiment.
We saw a similar technical setup in the market back in the autumn of 2023, which preceded a sharp 10% correction in the Nasdaq over the following month. That historical precedent suggests that once key support levels are broken, momentum can accelerate to the downside very quickly. Traders should be prepared for increased volatility in the weeks ahead.
For those trading derivatives, this is a signal to consider buying put options or establishing short futures positions. A decisive move below 24600 would act as further confirmation, opening the door for a slide toward our target zone of 24200/24000. We view any bounces back to the 24850/24950 area as potential opportunities to initiate new short positions.
Risk management is paramount in this environment. Shorts should consider placing stops above 25100 to protect against a sharp reversal. Any traders attempting to go long must use a tight stop-loss below 23850, as a failure to hold that level could trigger a much more severe decline.
