Chart of the Day - Monday, May 2nd, 2022

Today’s Chart of the Day was shared by Jason Goepfert (@jasongoepfert). The Nasdaq managed to close higher by 1.72% today after being down more than 1% and hitting an intraday 52-week low. While today's reversal may feel bullish, Jason points out that this sort of price action is often witnessed in bear markets. As you can see from the table, forward returns for the Nasdaq are negative across the board. It wouldn't be surprising to see a relief rally in the near term given how bearish sentiment is right now. However, longer-term trends remain damaged, and it's going to be hard to trust any potential rally that occurs beneath a downward sloping 200-day moving average. The Nasdaq could rally 15% from here and it would still be below a declining 200-day moving average.