The NASDAQ index is currently down 347 points, or 1.60%, dropping below its 100-hour moving average at 21,331.91. This change indicates a negative short-term trend and raises concerns about more selling ahead. In the past, when the index broke below the 100-hour average on August 1, it fell towards the 200-hour moving average, which is now at 21,119.99. If the index falls below this level, the bearish trend could strengthen, suggesting more declines. Traders are closely watching if the index can close above the 100-hour moving average or if it will continue towards the 200-hour moving average in the coming sessions. Attention is also on the Jackson Hole Summit, where Fed Chair Powell will talk about policy, impacting market sentiment. The 200-hour moving average is the first key support level. If the index declines further, it could hit the 38.2% retracement level at 20,864.09 and later the 50% midpoint around 20,573.83. Hitting these levels would mean a drop of about 4.25% from the August 12 peak, suggesting a significant correction if selling continues. The NASDAQ falling below its 100-hour moving average signals a warning. This shift points to a more bearish market outlook. The main question is whether sellers can keep the price below 21,331 as the day ends. This downturn is supported by rising market fear. The VIX, which measures expected volatility, has risen over 25% this week to 19.5, indicating increased anxiety among traders. This environment can lead to quick downward movements. The 200-hour moving average at 21,119.99 is now the next major support. On August 1, 2025, a similar break led directly to testing this level. Historical trends show that sellers are likely to target it next. For those trading options, now is the time to think about protective puts on indices like the QQQ. The CBOE put/call ratio has risen to 1.15, meaning more traders are buying puts than calls as they expect further declines. This defensive strategy is gaining popularity. All eyes are on Fed Chair Powell’s speech at the Jackson Hole Summit this Friday. Current market pricing from the CME FedWatch Tool shows an 83% chance of a rate cut at the next meeting. However, with the latest CPI report at 3.4%, any hawkish comments from Powell could unsettle the market. Given the uncertainty around the speech, strategies like a long straddle could be beneficial. This approach allows traders to profit from large price movements in either direction following Powell’s remarks. The unpredictability makes choosing a direction before Friday a risky endeavor. If the 200-hour moving average does not hold, our next target will be the support zone near 20,864. A further decline could lead us to the 20,573 level, marking a 4.25% correction from the highs on August 12. These are critical levels to consider for trading. Additionally, we must factor in the seasonal challenges ahead. Historically, September is the weakest month for stocks, a phenomenon known as the “September Effect.” This trend adds to the current bearish signals we are observing.

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