Correction or Bear Market? Nasdaq, Nikkei and the Dollar | Week Ahead 9th November 2026

Regime: Risk-off, but not acute

Correction or Bear Market?

Markets are either in a correction or at the start of a bear market. I lean towards a correction.

• Liquidity is healthy. M2 money supply is up 5.71% on the year.

• Credit is still flowing. Bank lending is rising, although standards are tighter.

• No major structural cracks. Without a liquidity squeeze or a lending freeze, I don't see the conditions for a sustained bear market yet.

What could change my view: credit spreads are widening, with high-yield spreads at 348bp. A move above 400bp would suggest the stress is spreading beyond tech.

Key Market Moves

• Volatility is easing. VIX futures peaked at 25.35 last week and are now down at around 20.

• The Nasdaq takes centre stage. It fell 4.9% last week after the midterm results, which markets read as raising the risk of tighter rules on data centre expansion in the US. Chip stocks fell 12% in a single day.

• The Nikkei followed. Japan's index is heavily weighted to AI names and fell around 9% on the week.

• Fed hike odds rose to around 77%. October payrolls came in at +165,000, well above expectations.

The Dollar

I was initially bearish on the dollar. DXY price action now looks corrective, and another high could come before any larger decline. The stronger jobs data and rising Fed hike odds support that view.

Trades to Focus On

• Nasdaq 100 short. Waiting for a pullback. I want to see a bounce that sets up the next leg lower before acting.

• Nikkei 225 short. Waiting for a pullback. Same thesis as the Nasdaq: an AI-heavy index exposed to the same risk.

• Russell 2000 short. Watchlist. Small caps carry the most floating-rate debt and could be the most vulnerable if the Fed hikes. Invalid if December hike odds fall below 50%.

• US dollar long. Watchlist. Waiting for DXY to confirm the next leg higher.

News to Watch

• Tue 10 Nov, US CPI (October). Expected +0.3% on the month, core +0.2%. A higher than expected reading further increases the chance of a Fed hike, which could support the dollar and add pressure on the Nasdaq and Russell 2000. A softer reading could trigger a relief rally in tech.

• Fri 13 Nov, US PPI (October). Expected +0.4% on the month. A hot reading points the same way as a hot CPI.

These are my views based on my own analysis at the time of writing. Nothing here is financial advice. Always do your own research and manage your risk.