If the Nasdaq “Crosses the Rubicon,” Get Ready By Lucas Downey, Contributing Editor, TradeSmith Daily As I write, the 25% tariffs on Canada and Mexico are in effect. China’s 10% tariff just doubled to 20%. And this new trade policy, along with other economic uncertainties, has pushed major asset classes all over the place… Interest rates have fallen hard, with the latest two-year Treasury yield breaking to 3.91%. Less than a month ago (Feb. 12), this benchmark read 4.36%. Equities have taken the plunge, too… with the S&P 500 down over 6% from Feb. 19. Likely more frustrating is the 9% drawdown occurring in technology stocks. The Nasdaq 100, full of tech behemoths, has been clobbered… nearly reaching correction territory from the Feb. 19 high. And this last point brings us to today’s very important message… This morning, the Invesco QQQ Trust ETF (QQQ), which tracks the Nasdaq 100, dipped below the 200-day moving average (200DMA). Using weekly data, that hasn’t occurred since March of 2023… two years ago! Now, if you’re pulling your hair out trying to make sense of the chaotic price action… Give yourself a break. Odds are you won’t find rhyme or reason for it. Instead, let’s measure the cold, hard data of what these price moves mean… | Recommended Link | | | | The man who predicted nearly every major AI winner has identified a small company with identical growth markers to early NVIDIA. If you’ve ever thought “I missed Nvidia, and I’ll never get another chance like that,” this presentation is for you. |  |
This Massive Line in the Sand Is About to Get Breached On Tuesday morning, the Nasdaq 100 dipped below the 200DMA. The growth-stock basket didn’t hang there long, as QQQ bounced into the close. Here’s a two-year chart of QQQ, with weekly candles showing how the 200DMA has been a level of support since the index last breached it in March 2023: 
Now, 200 days is a long time. Breaking that moving average price is quite rare and can amount to a big shift in the market direction. It’s like Caesar crossing the Rubicon… Once it happens, chances are good that things won’t be the same afterward. Using weekly data back to 2000, I was able to find 367 instances where QQQ closed the day below its 200DMA. Here’s the shocking truth… When you look at the past 25 years, falling below the 200DMA hasn’t exactly meant stocks are moon-bound. In fact, out to three months later, the basket is flat. Only after six months do we see tiny average returns of 1.82%. Twelve months later, we find 9% returns… not too shabby. Many pundits will point to this information to highlight their bearish stance. Just don’t fall for their tricks. Looking at data beginning in 2000 heavily weights two major recent bear markets: the dot-com crash and the Great Financial Crisis. Those were brutal and represent major market setbacks of epic proportions. When you look at the 200DMA study again, but through the lens beginning in 2009, you’ll see what I believe is more likely ahead… An amazing time to strap on the helmet and buy high-quality growth stocks! Since 2009, when the Nasdaq QQQ ETF closes below its 200DMA, a bear-beating rally follows with: - Three-month average gains of 6.5%
- Six-month gains of 13.5%
- 12-month gains of 28.2%
I’ve put both the 2000 and 2009 start dates on this signal for comparison. Notice the average win rate skyrockets post 2009 (in white): 
While tough tariff talk makes investors dizzy, stay grounded. Rarely do you get an opportunity to find mega-cap growth stocks below their 200DMA. To be fair, we have yet to close below this line… But if this volatility keeps up, we’ll pierce it in no time. The time to prepare is now. Keep this graphic handy, and utilize high-performance, data-driven software like TradeSmith. Eventually this line in the sand will break… But the great news is, you’ll be prepared! Regards, Lucas Downey
Contributing Editor, TradeSmith Daily P.S. Back in May 2016, my friend and colleague Louis Navellier recommended Nvidia due to it being a leader in the GPU chip industry. Now, Nvidia was trading at just $1 (split-adjusted) at the time, and most people knew nothing about how powerful these GPUs were… But of course, you already know what happened next. 
Nvidia not only soared more than 7,000%… It became one of the biggest companies in the world, eclipsing a $3 trillion market cap. Now Louis is putting his reputation on the line with his next big Nvidia call. He says that when Nvidia announces its new AI breakthrough on March 20, it will transform the world forever… And potentially send one tiny small-cap stock into the stratosphere faster than anyone imagined. That’s why Louis is holding a private briefing this coming Thursday, March 13, to get you ahead of the news. Whatever your opinion is of Nvidia or AI, I urge you to join Louis next Thursday at 1 p.m. ET for this time-sensitive briefing. Click here to reserve your spot now. | 
