Let me give you a quick refresher on what happened back in 2000 with the Nasdaq index.<\/p>\n
The Nasdaq topped out in March 2000 and viciously sold off over 38% in just two months, bottoming in May.<\/p>\n
Investors were then able to breathe a big sigh of relief as the market rallied over 40% during the summer months. But any signs of optimism were ultimately short-lived. <\/p>\n
The Nasdaq topped out by the end of August before another 80% crash. The bear market didn’t end up bottoming out till October 2002.<\/p>\n
You can see how it all unfolded on the chart below.<\/p>\n
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![\"Image\"](\"https:\/\/cdn.jeffclarktrader.com\/JMU\/images\/202306\/20230612-JMU-01_niq134.png\")
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It’s very possible that we have a similar path ahead of us in this current bear market. Here’s a price chart of the Nasdaq from late 2021 to present.<\/p>\n
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![\"Image\"](\"https:\/\/cdn.jeffclarktrader.com\/JMU\/images\/202306\/20230612-JMU-02_niq136.png\")
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As you can see, we have a very similar setup in place right now as we did back in 2000. We have the same 38% decline followed by a 40% rally.<\/p>\n
Apart from the price action, there’s also another striking similarity between today’s market and the dot com one.<\/p>\n
Back then, practically any company that had anything to do with the internet did really well. The poster child for the dot-com bubble was Pets.com, an online pet supply retailer.<\/p>\n
Investors loved the stock despite the fact that the company didn’t have a scalable business plan, was losing money on every sale, and couldn’t come close to turning a profit. The company eventually ended up bankrupt. <\/p>\n
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Free Trading Resources<\/strong><\/p>\n Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/p><\/div>\n<\/div>\n <\/p>\n Today, the craze is all about artificial intelligence, or AI. On May 24, chipmaking giant Nvidia reported blockbuster earnings.<\/p>\n The surge in demand for Nvidia chips was due to AI researchers using the company’s silicon to further their own projects.<\/p>\n Nvidia’s earnings announcement saw the company join the extremely exclusive $1 trillion market cap club.<\/p>\n Now to be clear, I’m not saying that Nvidia is another Pets.com, or that AI is just a passing fad. The point of these comparisons has more to do with how market sentiment right now is similar to what it was back in early 2000.<\/p>\n The internet has gone on to change the course of human civilization. I’m certain that AI will have an even more profound effect.<\/p>\n That doesn’t mean that we’re not creating another bubble in the short term, however. It will be fascinating to see whether or not the Nasdaq puts in a very important market top in the days and weeks to come.<\/p>\n Happy trading,<\/p>\n Imre Gams<\/p>\n <\/p>\n