Nasdaq Stalls at 22,544 as Tech Carnage Spreads: Is the Growth Trade Dead or Just Sleeping?

The Nasdaq has always been the market’s favorite adrenaline shot, but this week it feels more like a sedative. At 22,544.25, the index is frozen in place, as if the entire Silicon Valley complex collectively hit the circuit breaker and went out for a very long lunch. The reason? A trillion-dollar tech wipeout that has left even the most seasoned traders blinking at their screens like they’ve seen a ghost.

Let’s not sugarcoat it: software stocks are in freefall, AI darlings are suddenly persona non grata, and the only thing moving faster than layoffs is the exodus from anything with a growth multiple above 20. The headlines are relentless, "Software stocks are selling off," "Trillion-dollar tech wipeout ensnares all stocks in AI's path," "January layoffs hit highest level since 2009." If you’re long the Nasdaq, you’re probably feeling like you just walked into a casino where the house always wins and the drinks are no longer free.

But the real story isn’t just the carnage. It’s the eerie calm that’s settled over the index itself. Despite the chaos, the VIX is parked at $21.57, barely twitching. The Nasdaq is flat, refusing to budge, as if the algos are waiting for someone else to make the first move. Is this the calm before the next leg down, or is the market quietly digesting the pain and getting ready to rotate into something, anything, that isn’t bleeding out?

Here’s what we know. The selloff started with AI anxiety, concerns that the sector’s growth narrative is running on fumes. Dan Ives of Wedbush calls it the worst software rout in 25 years, and he’s not exactly known for understatement. Tech layoffs are surging, with January cuts at their highest since 2009. Job openings just hit a five-year low, and the S&P 500 is officially in the red for the year. The rotation out of mega-cap tech is real, and it’s not just a few nervous hands hitting the sell button. It’s a full-blown stampede.

Yet, the Nasdaq isn’t falling off a cliff. It’s just… stuck. No panic, no relief rally, just a grinding stalemate. That’s not normal. In fact, it’s downright weird for a market that’s supposed to be the poster child for volatility. The last time we saw this kind of paralysis was during the early days of the pandemic, when everyone was too scared to make a move. Now, it feels like the market is waiting for a new narrative to emerge, one that doesn’t involve AI, layoffs, or the ghost of 2009.

The context here matters. In the past, tech selloffs have usually been sharp, brutal, and mercifully short. The market panics, flushes out the weak hands, and then snaps back. This time, the pain is lingering. The rotation into commodities, gold, and non-US equities is picking up steam, as traders look for anything that isn’t tied to the US growth story. The old playbook, buy the dip in tech, ride the momentum, cash out before the music stops, just isn’t working. And that’s making everyone nervous.

The macro backdrop isn’t helping. Weak job data, a sluggish labor market, and fears of a growth scare are all weighing on sentiment. The Challenger report shows a 205% jump in layoffs from December. Healthcare, transportation, and tech are all scaling back, and the market is starting to price in the possibility that the US economy isn’t as resilient as everyone thought. The S&P 500 is down for the year, and the usual safe havens, bonds, gold, even cash, are suddenly back in vogue.

But here’s the thing: markets don’t stay stuck forever. The current stalemate in the Nasdaq is unsustainable. Either the bulls find a new narrative to latch onto, or the bears finally push the index through support and trigger a fresh wave of selling. The technicals are clear, 22,500 is the line in the sand. A break below that level could open the floodgates, while a bounce could spark a short-covering rally that catches everyone off guard.

Strykr Watch

Right now, the Strykr Watch are obvious to anyone with a chart and a pulse. 22,500 is the immediate support. Below that, the next stop is 21,800, which held during the last major drawdown. Resistance is stacked at 23,250, and a move above that would signal that the bulls are back in control. RSI is hovering in neutral territory, but momentum is clearly to the downside. The moving averages are rolling over, and the breadth is ugly, fewer than 40% of Nasdaq components are trading above their 50-day.

Volume has dried up, which is never a good sign in the middle of a selloff. The algos are in control, and they’re not interested in taking big directional bets until someone else blinks. If you’re trading this market, you need to be nimble. The risk of a sudden air pocket is real, but so is the potential for a violent snapback if sentiment turns. Watch for a break of 22,500, that’s your trigger for the next big move.

The risks are obvious. If the labor market data continues to deteriorate, or if we get another round of ugly earnings from the tech sector, the Nasdaq could easily break down. A spike in the VIX above 25 would be a clear signal that the market is moving from complacency to outright panic. On the flip side, if we get a dovish surprise from the Fed or a positive headline on the AI front, the index could rip higher in a classic bear trap rally.

Opportunities exist for those willing to trade the range. A long entry near 22,500 with a tight stop below 21,800 offers a decent risk-reward. On the short side, a break below 22,500 targets 21,800 and possibly lower. If you’re looking for a longer-term play, consider rotating into sectors that are showing relative strength, commodities, gold, or even select non-US equities. The growth trade isn’t dead, but it’s definitely on life support.

Strykr Take

This is a market that’s begging for a catalyst. The Nasdaq can’t stay stuck forever. When it moves, it’s going to move fast. The smart money is watching the same levels you are. Be ready to act, because the next big trade is coming, and it probably won’t look like the last one.

datePublished: 2026-02-06 00:00 UTC