After falling nearly 4% from its all-time high, the Nasdaq is on pace to string together its fourth straight day of decent gains. To put that in perspective, the last time the index was up 0.25% or more for at least four days was in February. From a technical perspective, how the Nasdaq follows up today’s early strength will have a big impact on technical sentiment in the near term. As shown in the chart below, in early trading today, the Nasdaq is hovering just under the downtrend that has been in place from that high from early June. If it can continue to rally above that trendline, it would be a bullish sign, but a second lower high here would really weaken the picture in the short-term.
Like the broader Nasdaq, the Nasdaq 100, which is more heavily weighted towards the FANG stocks, saw a much larger decline than the Nasdaq from its peak (-5.4%). Like the Nasdaq, it has also rebounded decently from those lows. That said, it still has a bit more wood to chop on the upside before that newly formed downtrend comes into play.