Using Linear Regression to analyse Nasdaq, beware market crush in March to May 2022

 We use Linear Regression to analyse the Nasdaq Index (IXIC). Linear Regression analysis uses past data to predict future trends. A linear regression channel can be thought of as an equilibrium point and a standard deviation equilibrium line can provide support or resistance. 1 standard deviation means 68% of the data is within +/-1 standard deviation equilibrium line and 2 standard deviation means 95% of the data is within +/-2 standard deviation equilibrium line. The Nasdaq (IXIC) is now running at the top of the channel and has only moved through the top of the channel in the last 2000 years, after incorporating 20 years of Nasdaq data. According to statistics, there is a 95% chance that the Nasdaq will move within this linear reversion channel, so be aware of this and be careful.


As we can see, the Nasdaq has now pulled back from the top, so we can watch out for a short period of overselling.


However, we have mentioned before that the US stock market has been in a seven-year crash cycle since 1966 (see my previous article or my book published before)


So we have to watch out for a crash from 2022/3 to 2022/May.



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