The NASDAQ 100 fell quite a bit during the trading session on Monday as the 14,000 level continues to be a bit of a barrier. At this point, the market looks as if it is ready to pull back some, which helps in a long-term uptrend. During the day, the S&P 500 was also negative, but the NASDAQ 100 was the worst. That being said, the market is likely to see buyers on these dips, especially if interest rates can stay somewhat stable in the meantime. The tech stocks tend to do better when interest rates are either lower or stable, as growth stocks tend to do better. The market should continue to find several areas underneath that could be interesting.
The 13,333 level was the neckline for an inverted head and shoulders, so I think that would be a very interesting place to start buying if we get some type of supportive candlestick in that general vicinity. The 13,500 level could also be an area that attracts a certain amount of attention as well.
On the other hand, if we were to break above the highs from the Monday session, the market could continue to go higher, eventually reaching towards the 15,000 level, which I have as my longer-term target. This market is obviously a very bullish market, so you cannot try to short it. Even if we did break down significantly, if we were to slide below the 50-day EMA, I would be a buyer of puts, as it limits the amount of loss that I can incur. Furthermore, the Federal Reserve will do whatever it can to lift the markets as per usual, so with that in mind you cannot be a seller.
In the short term, it looks like we are trying to consolidate in this general vicinity, but this is a market that will continue to find reasons to go higher no matter what, and it is also worth noting that we recently had made a “higher high” after pulling back to that major uptrend line. The market continues to show strength despite the fact that there are a lot of concerns out there and rising yields in America. This is reason enough to look to the upside only.
