Mean Reversion in progress

The Nasdaq Composite peaked on November 22, 2021 at 16,212.

It has wiped off nearly 5,000 points or 31%.

7 months later (around June 14, 2022) it has declined to its long term mean reversion, which I measure by its 200 week moving average.

My writings through November and December 2021 warned of the stretched and overbought price action in the index.

The chart below shows the work the index has done to reset itself.

Such ‘long-term’ mean reversion are quite an occurrence.

July 16, 2022

by Rob Zdravevski

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