Reading Markets Through NASDAQ - The Art of Interest Rates and Market Bottom Detection

🎯 Why Is NASDAQ the Center of the US Market?

When analyzing the US market, the most important index is NASDAQ. While the Dow Jones is also important, NASDAQ most accurately shows the health of the market.

The reason is simple: NASDAQ houses the tech stocks driving the modern economy—Apple, Microsoft, Amazon, Tesla, NVIDIA, and more. The price movements of these companies essentially indicate the direction of the US economy.

💰 The Paradox of Emergency Rate Cuts

Many investors simply think "rate cut = good news." But history tells a different story.

📊 Historical US Emergency Rate Cut Cases

The Federal Reserve has made emergency rate cuts 7 times in total, and each time, the US market experienced a major crash.

Most Recent Case: March 16, 2020

Item	Details
Rate Change	1% cut (to 0.25%)
NASDAQ Reaction	-12% crash
Dow Reaction	-12% crash

Why does this happen?

🔍 The Meaning of Interest Rates According to Trends

Situation	Rate Cut	Rate Hike
Uptrend	🚀 Surge factor	Continued rise
Downtrend	💥 Plunge factor	Accelerated decline

💡 Key Insight: It's not the rate itself that matters, but what the current trend is.

An emergency rate cut during a downtrend is interpreted by the market as the Fed signaling "the situation is that serious." That's why it acts as bad news, not good news.

📈 Finding Bottoms with NASDAQ vs Dow

Comparing NASDAQ and Dow is very useful when judging market bottoms.

Bottom Detection Formula

NASDAQ decline rate < Dow decline rate → Bottom is near
NASDAQ decline rate > Dow decline rate → Bottom is still far

Why Does This Work?

NASDAQ, being tech-heavy, most sensitively reflects the market's risk appetite.

• NASDAQ falls less = Confidence in tech maintained = Investor sentiment recovering
• NASDAQ falls more = Risk-averse sentiment strengthening = Further decline possible

Practical Application Examples

Date	NASDAQ	Dow	Judgment
Day A	-3.0%	-2.5%	⚠️ Bottom still far
Day B	-2.0%	-2.5%	✅ Bottom approaching
Day C	-1.5%	-2.0%	🎯 High rebound potential

🔑 What Institutional Ownership Tells Us

As mentioned earlier, the US market has over 73% institutional ownership. This means:

1. Trends form strongly - Institutions have consistent investment strategies
2. Less emotional volatility - They move more logically than retail investors
3. Principles work well - Market laws apply predictably

📊 Practical Checklist

Things to check before investing in US markets:

✅ Daily Checks

• Is the current trend up or down?
• Which is moving stronger—NASDAQ or Dow?
• If there's interest rate news, how should it be interpreted in the current trend?

✅ Weekly Checks

• Is there any change in trend intensity?
• Are global markets (Asia, Europe) moving differently from the US?

🌟 Conclusion: Simple but Powerful Principles

The essence of US market investing summarized:

1. Trends come first - More important than news
2. Analyze with NASDAQ at the center - Market health indicator
3. Interpret interest rates within trends - There's no simple formula
4. Judge bottoms by comparing NASDAQ vs Dow - Useful in practice

Master these principles, and there's no easier market than the US market. Because of high institutional ownership, it moves honestly, and if you know the trends, you can invest without knowing economics.

Investing doesn't need to be complicated. Know the principles, follow the trends.