The NASDAQ 100 initially rallied during the trading session on Wednesday as the world awaited the FOMC Meeting Minutes. That being said, people had been a bit cautious, as you never know what the minutes will release. The market is bullish overall, but it is worth noting that we fell significantly to form a bit of a shooting star, despite the fact that initially the release was very bullish for stocks.
I think we are looking at a scenario that should continue to favor buying on the dips, but we may have gotten a little bit extended, so a little bit of a dip is probably a good thing. The 15,000 level above is obviously an area that will attract a lot of attention due to the fact that it is a large, round, psychologically significant figure and a good headline-worthy level. To the downside, if the market were to break down significantly, I think there is a bit of a “floor in the market” closer to the 14,000 level, an area where we had recently broken out of and see the 50-day EMA.
Looking at the chart, you can make an argument for an ascending triangle underneath that measures for a move to the 15,000 level, and we have almost gotten there. There is nothing on this chart that tells me we are about to change trends anytime soon, just that we may have gotten a little exhausted and perhaps overextended, but at this point I look at any pullback in the NASDAQ 100 as an opportunity to pick up value. Remember, it is only a handful of stocks that tend to move this index, such as Facebook, Microsoft, Tesla, and the like. In other words, it is all the “Wall Street darlings” that everybody else talks about ad nauseam.
If we turn around and break above the top of this candlestick, I might not be a bit of a buyer, due to the fact that the 15,000 level is so important. If we can break above the 15,000 level on a daily close, then I would be looking to go long again, as it would then be beyond what is an obvious resistance barrier. I have no interest in shorting.
