Nasdaq 100 has failed to reclaim its June record high, while compressed VXN volatility and a widening Expanding Wedge suggest the risk of a sharper multi-week decline is increasing.
Key takeaways
- VXN volatility is nearing an extreme contraction level, a setup that previously preceded US Nasdaq 100 declines of roughly 12% in January and June 2026.
- US Nasdaq 100 is trading below its 20 and 50-day moving averages, while a downward Expanding Wedge points to increasing downside volatility risk.
- A break below 28,880 may expose 28,630/28,200 and 27,093, while a daily close above 30,195 would invalidate the bearish scenario.
Since hitting a fresh all-time intraday high of 30, 773 on 3 Jun 2026, the US Nasdaq 100 CFD (a proxy of the Nasdaq 100 E-mini futures) has failed to make another fresh all-time high.
It traded sideways over the past three months despite recent strong earnings beats and guidance from key Nasdaq-100 mega-cap technology stocks, such as the Artificial Intelligence (AI) juggernaut NVIDIA1.
Interestingly, there are now two potentially significant bearish technical elements flashing on the US Nasdaq 100 CFD that may trigger another multi-week corrective decline.
Let’s unpack from a technical analysis perspective.
Nasdaq 100 Volatility Index has hit a relatively low complacency level
Fig. 1: Daily chart of US Nasdaq 100 CFD with VXN as of 11 Sep 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
The Cboe Nasdaq 100 Volatility Index (VXN) measures the implied volatility of the Nasdaq 100 over the next month from prices of near-term put and call options of the underlying Nasdaq 100.
Often called the “fear and complacency gauge” for technology and growth stocks, it serves as a contrary indicator.
An extreme “high fear level” (high implied volatility) may trigger a significant bullish reversal in the Nasdaq 100, and, conversely, an extreme “low complacency level” (low implied volatility) may trigger a significant bearish reversal.
To measure and pinpoint whether the VXN has reached a significant high or low level, we can overlay it with the Bollinger Bandwidth indicator, which measures the percentage difference between the upper and lower Bollinger Bands.
A declining (contracting) Bollinger Bandwidth indicator value indicates a low-volatility environment, which, at a certain point, may trigger a high-volatility movement next, and vice versa for a rising (expanding) Bollinger Bandwidth indicator value, which may lead to a low-volatility movement next.
The Bollinger Bandwidth reading of the VXN as of Friday, 11 September 2026, was 19.21, which is fast approaching the lowest contraction level of 11.79 based on a prior period of 125 days.
A similar observation has occurred twice in the past eight months, on 29 January 2026 and 3 June 2026, when the US Nasdaq 100 CFD declined by 12.9% and 11.96%, respectively, as calculated by its highest to lowest levels (see Fig. 1).
Nasdaq 100 is oscillating within an “expanding wedge”
Fig. 2: US Nasdaq 100 CFD medium-term trend as of 14 Sep 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
After a failure to break above the current 3 June 2026 all-time intraday high of 30,773, the price action of the US Nasdaq 100 CFD has started to oscillate within a downward-pointing “Expanding Wedge” configuration (see Fig. 2).
The distance between the upper and lower boundaries of the “Expanding Wedge” is widening, suggesting potentially higher volatility in price action going forward.
Given that the US Nasdaq 100 has traded back below the 20 and 50-day moving averages, this set of bearish technical elements suggests an increasing risk of a stronger bout of downside volatility.
Watch the 30,195 key medium-term pivotal resistance and a break below the 28,880 intermediate support to expose the medium-term supports at 28,630/28,200 and 27,093 (also the key 200-day moving average).
On the other hand, a daily close above 30,195 invalidates the bearish scenario, opening the door to a potential recovery towards the next medium-term resistances at 30,715/30,773 (all-time high area) and 31,300 (Fibonacci extension).
This article and its contents are intended for educational purposes only and should not be considered trading advice.
