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$NSDQ100 is going through what is most likely a healthy correction, after the high valuations we’ve seen throughout 2020 for the Tech sector. This is also scaring many retail investors but I’ve also seen many of them doing what is the smartest thing to do, that is reinforce the investments by adding funds and that way dollar-cost averaging, taking leverage of the dips.

Now, why is it going down? 

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Exactly on Feb 16, the 10y and 5y yields rose by 9% and + 17% respectively. In this exact date NSDQ100 started dropping by 6-straight days.

On Feb 25. the 10y and 5y yields rose by 10% and 37% respectively, as NSDQ100 dropped 4% in a single day. 

Interestingly, yesterday the 10y and 5y yields rose by 7% and 12% as NSDQ100 dropped almost 3%.

All of this situation with the bonds selling off is scaring a lot of investors with the possibility of higher inflation and interest rates coming, which I think is most likely in the future, but not now according to some indicators as the CPI for example. Also yields are still below pre-pandemic levels.

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Feb 11 it was ???????????????? ???????? ?????????????? ???????????? ?????? ?????? ?????????? ???????? ???? ????????????????. The reported number was actually good as it was showing a slowing down in jobless claims, the problem is that in the next week, on Feb 18, that number was ?????????????? ???? ???????? ?????? ?????? ?????????? ???????? ???? ???????????????? and the reported number for the second week of February was 861K, which only made the sentiment getting worse. 

Having said that, I do believe that the sell-off is also because many ?????????????????? ?????? ???????????? ???? ????????, ?????? ???????????? ???????????? ?????? ?????? ?????????????? ???????????? ???? ???? ?????????? ???????? ????????????????, so they are taking some of the profits now.

Also noteworthy that today Powell will be speaking about the economy and probably some Q&A. It’s also important to read between the lines of what he says, even though that usually is always the same thing ??

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Since the NSDQ100 started to plummet I’ve set a support line at the $12.455 level. This is basically the resistance levels of 2020 Sept-November correction we saw. Usually If the price rises above a resistance level, it will often become support, so that’s my stronger support level to keep an eye on.

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Even though I still look at this as a correction given the current economic panorama, it's interesting to look back in history and see how much time it took from the markets to recover from a crash. If you still think that patience doesn't matter, reconsider your thoughts.

• ????????: 39% crash over 3 weeks, 91 weeks to recover 
• ????????: 28% crash over 19 weeks, 63 weeks to recover 
• ????????: 43% crash over 24 weeks, 86 weeks to recover
• ????????: 38% crash over 4 weeks, 33 weeks to recover 

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It’s not the first time I see copiers leaving because they are afraid or because they can’t see red in their copiers and I get it, totally understand. But… the reality is that in the 2020 Feb/March crash many left from copying me or other PI’s, who actually ended March in green, so those copiers who left only lost money because they were not patient enough. 

The same applies now, you gotta be patient with the PI’s you’re copying. Don’t expect to become rich instantly. ???????? ???? ?? ????????????????, ?????? ?? ????????????.

Just make sure that you’re investing in good Popular Investors and don’t monitor eToro every minute as that will most likely make you take emotional decisions and lead you to lose money as the other 70% of retail investors.

Now it’s up to you to choose your side ??

Would you like to invest with no efforts? Find my profile on eToro:

?? https://www.etoro.com/people/paulogabrielsa

Thanks for reading.

Let me know what's your opinion in the comments down below.

Send me PM if you want to connect and discuss furthermore.


All the best,

Paulo Sá