NAS100: Stagflation-risk shorts!US Tech 100 IndexFUSIONMARKETS:NAS100jinweiangFundamental Narrative: With stagflation peeking around the corner and a recession scare incoming, it is easy for us to have our fundamental biases as bearish for the upcoming week. First, we must define what is 'Stagflation'. From online sources, stagflation is an economic condition defined by 3 characteristics: slow economic growth, high unemployment and high inflation. The war and its result has allowed us to check 2 of these conditions. With oil prices pricing on the higher end and still presenting more room to move to the upside (as covered in my previous XTIUSD analysis), inflation expectations (and actual inflation) continue to rise. The closure of the Strait of Hormuz has presented supply-chain disruptions and energy cost increases, which further push oil prices up, and causes slow economic growth as well. The uncertainty lies in the last condition, which is unemployment rate. From what I see, there is no clear recession-indicating unemployment claims just yet. This week, there will be more news to analyse for unemployment. Thus, for this idea, we can say that the probability of success is likely north of 60%. To make things simpler to understand, let me break down the current macro backdrop into 5 stages. Stage 1: Geopolitical oil / war shock Stage 2: Inflation expectations rise Stage 3: Treasury (Nominal) yields rise and DXY strengthens as rate cuts get priced out Stage 4: Equities and cyclical assets weaken as financial conditions tighten Stage 5: If the climate is sustained long enough, a recession is likely I believe we are currently in the later stages of 2-4, and looking at a rising recession probability, but not yet confirmed. Bonus: We can also take the confirmation of a further drop in the price of copper, paired with rising oil costs, as a confirmation for stagflation. As such, I believe that the NAS100, consisting of pricey, long-term growth stocks, whose valuations are sure to decline due to higher discount rates, paired with lower return expectations due to rising costs from high oil prices. Along with rising yields, people now have a good reason to liquidate their stock positions. This makes me bearish on US equities. This fundamental bias will weaken or change if any of the factors I have listed flips, and more bearish confirmations include higher unemployment. However, I am not gaming on a instant entry into a short position, because the market is not screaming a recession just yet. One more thing to monitor are high-yield credit spreads, which based on my analysis, is not currently at crisis gap yet. If a blowout widening were to happen, there would then be imminent recession fears. In the technical narrative below, I will share what my gameplan looks like. Technical Narrative: On the 1H chart, it is clear that price is bearish. It is currently trading below the monthly and weekly VWAPs, and below the weekly volume profile VAL. However, it looks to already be in a decently extended downtrend, and I do not want to jump in immediately due to FOMO. I would prefer to see a short-term rally/retracement before entering shorts. On the HTF, price has dropped in what seems to be a markdown starting from the zone ~23,700. I will be looking for a retracement or weak bounce acting as a LPSY (Last Point of Supply) before entering shorts. Some possible entries are: - Short Entry 1: 23,237 SL: 23,434 - Short Entry 2: 23,558 SL: 23,793 - Targets: Support Target 1: 22,790 Support Target 2: 22, 677 - Idea Invalidation: Strong close above 23,777 resistance level. As usual, please manage your risk accordingly and stick to your rules. This is my first NAS100 analysis posted and given my less than 1 year of trading experience, it is prone to mistakes. If you are following this idea, please take it with caution, or if not, use it as a confirmation for your own analysis! Fair winds!