NASDAQ-100 (USTEC) | Elevated risks arise US Tech 100 CFDCITYINDEX:USTECH100CFDDatTongSentiment: - Extreme Fear in the market (F&G = 23) - Investors are bearish (49% bearish vs 37% bullish) - Volatility elevated but not extreme (VIX 20) - Higher Put activity and an elevated put/call ratio (1.11) - Hedge funds unwinding crowded AI longs (50% market cap concentration) - Record institutional options activity positioning for Q4 2025-Q1 2027 - COT report: No latest data due to the US government shutdown Interpretation: - Put hedge elevated = cautious as institutional hedging and distributing stocks to retail - Extreme Fear + High Bearishness = Potential buying opportunity (later stage) - When sentiment is this negative, often near bottoms Fundamental: - Valuation Concerns: - 24-25x Forward P/E - vs 20-22 for 5-year average - 3.08-3.37x P/S ratio - 2.35-2.41 for 5-year average - Dec Fed cut probability is declining Technical: - USTEC broke the ascending trendline and EMA21, indicating potential mean reversion to EMA78, which is just above the support cluster at around 24000. - Breaking below 24000 may prompt a decline to the following support cluster at around 23000, which is a prominent zone for sentiment contrarians step into the market if market fear remains at an extreme level. My take on this: - The distributing process may last for a while before reaching more extreme panic sentiment, prompting consideration of a contrarian approach based on technical levels. - Therefore, we need to watch the price action to determine the best entry setup for the Long position. Then, for now, short-term pressure is the better take. Analysis by: Dat Tong, Senior Financial Markets Strategist at Exness