Updated: May 6, 2021
Above is a yearly chart of Nasdaq, the singled out box represents the whole year price movement in 2018? What is your interpretation of 2018's price behaviour?
We study into Dow Jones, S&P and Nadaq, all of them gave us a similar reading and Nasdaq been the most obvious. Nasdaq reached it's trough in 2008 and started this rally, it has since risen at least 7 folds. Studies shown a potential reversal and we may have seen the historical peak being created in 2018.
How to decode last year movement?
Behavioural science provide an explanations for why people make irrational financial decisions and this can be measured through the study of the price behaviour of technical analysis. It also refers to as studying into the market psychology and in the macro picture is called behavioural economics. In short, we believe there is likely to have a reason for every price movement, especially in those significant ones.
2018 started almost unchanged from 2017, shortly, it rallied euphorically and reaching it's historical peak. However, the market lost most of it's gain and closed with great disappointment in 2018. Also to note, the year 2018 transacted volume was the highest ever recorded. All these studies are pointing to a bearish markets ahead,
Above is not a recommendation, analysis was made based on studies, please see disclaimer.