Nasdaq Nears Washout With Late October Rebound In Sight

Nasdaq fell hard last week and now sits inside the weak October stretch that was flagged early. Gauges flipped to sell, many names gave early warnings. The idea on the table is clear: the low forms within a week, then repair starts from late October. Think of a stretched spring that snaps back fast. CNBC wrote on October 19 that after the S and P 500 lost almost 2 percent and Nasdaq lost 4.5 percent on the week, buyers returned on Monday. One day proves little, yet the floor work has started.

On technique, the daily wave trend oscillator sits close to washout, with October 29 to 30 framed as an ideal turn window. Similar washes produced strong repairs before: about 25 percent in August 2024, about 53 percent after the tariff crash, about 36 percent in the recent war rally. XTB noted on October 19 that the Nasdaq Composite closed at 26,430, up 1.11 percent, while the semiconductor gauge ended an eight session slide worth 15.7 percent. The same note put RSI at 39.6, not fully washed. So patience matters.

The election math rests on a simple market logic: split Congress calms nerves. When one party holds the House and the other holds the Senate, extreme moves get hard. Now Republicans bleed in the House. That narrows room for solo tariff swings. If the Senate also flips, gridlock deepens. Removal needs 60 votes, so no outcome finishes without some Republican support. PewResearch wrote on October 15 that most Americans expect Democrats to take the House while the Senate stays a toss up.

Trump brake and war knot

The leadership style strains markets. Tariffs rise one day and fade the next. It feels like a hesitant driver with nervous passengers. A congressional brake would cut that sway, since new laws turn harder. The other side deserves a hearing too: words and military steps can still shake prices. Even so, a legislative lock blocks the most extreme paths. That is why markets price a split setup as relief.

On Iran the call ties to the vote calendar. Pressure builds before the vote, hard bargaining follows after. Tehran may stall into the vote and then face the table, since the blockade hurts its economy. Al Monitor wrote that Tehran keeps an offer to reopen Hormuz within six days, with talks on day seven if Washington accepts. TheNationalNews reported on October 20 that Pakistan army chief went to Tehran for mediation while Qatar said contact never broke. While sea lanes stay shut, oil and inflation push higher.

Rates form the knot. The Fed restarted hikes and September inflation ran hot. Headline prices rose 3.7 percent for the year against 3.6 expected, up from 3.4 in August. The monthly gain was 0.6 percent above hopes. Yahoo wrote that the hot print put an October move back on the table. Investing reported on October 14 that Daly sees more moves as likely needed but no rush at the October 27 to 28 meeting. While the 10 year stays above 5 percent, multiples stay pressed. It feels like lifting blankets before fever breaks.

Rally map and level reading

If repair comes, the most beaten names run first. High beta groups, space and semiconductors lead. The least fallen rises least, which is normal. CNBC wrote on Monday that chips and mega tech led, with the semiconductor fund trying to break a nine day slide. XTB added that bargain hunters stepped in but the 50 day line must break before a turn counts. So expect a selective bounce, not a uniform wave. One color never paints the whole basket.

For semiconductors the levels sound clear. Below sit 527, then 500, then 495. Above stands an 820 target. The break of 610 gave a sell signal, so selling here to buy cheaper next week plays with fire. The daily chart lags washout while shorter frames sit near it. XTB listed supports at 28,907 and 28,175 and 27,243, with resistances at 29,935 and 30,421 and 31,600. Treat levels as alarms in steps, not deeds to one line.

Rocket Lab shows how high beta behaves. Price sits near 49.5 while the analyst median sits near 105, leaving room above 100 percent. MarketWatch puts the average of 23 firms at 111.89 with a buy tilt. Past runs reached 85 and 150 and 160 and 200 percent. Weekly gauges sit near the 2024 launch zone. Think of embers that glow when blown. The group falls fast and returns fast when terms shift. Read it as conduct, not a single ticket.

Two lights sit ahead: full washout plus fading vote fog. When both turn green, footing firms. Next week Tuesday to Wednesday forms the window under talk. Mega earnings will sharpen direction, while oil and Hormuz read with inflation. The slide may stretch further and test nerves to the end. So step plans, cash balance and no stubborn stands matter. Panic selling and blind loading burn the same fire.