Could the Nasdaq Composite go to 25,000 in the next 16 months? It is possible. Could it reverse today and crash? Yes, this is also possible.
The key point is that markets can become wildly speculative for different reasons. In this case, the Federal Reserve's monetary policy has provided more liquidity since March 23, 2020 than in its entire history. So while we have a pandemic that has hurt the economy since February 2020, speculators have used the easy monetary policy provided by the Federal Reserve to drive prices higher in equities and most notably tech stocks.
It is almost as if tech stocks have become a "safe haven" for assets. Even though bubbles don't typically stem from liquidity driven pandemics, they are typically a result of massive speculation.
We are using our automated trading strategies to take mostly long trades in the stock index futures such as the E-mini Nasdaq and E-mini S&P while staying nimble and looking for opportunities to take short trades as well using our Market Portfolios.
Here is the EasyLanguage Indicator for Tradestation
inputs: Price( Close ), Length( 200 );
variables: Avg( 0 ), Diff(0) ;
Diff = Price-AverageFC( Price, Length ) ;
Plot1( Diff/Close, "Diff" ) ;