The NASDAQ 100 has fallen a bit during the trading session on Thursday to reach down towards the 50 day EMA. However, we have bounced from there, so it shows signs of strength and now we are testing the bottom of the previous uptrend line that we had broken through. The 15,000 level is just above and offering a certain amount of resistance. At this point, the market looks as if it is going to continue to be very noisy, and even though we had broken down through an uptrend line, it looks as if we are going to continue to grind sideways in some type of messy consolidation.
There are a lot of concerns out there when it comes to the global economy, and that of course will have a lot to do with what happens with various indices. The size of the candlestick is relatively strong, and the fact that we are closing at the top of the range is likely to continue to go higher if we get any type of positivity in the market. If we were to break down below the 50 day EMA, then it is likely that the market will reach towards the 14,500 level, perhaps down towards the 14,000 level which of course would attract a lot of attention.
The market continues to be a bit of a “buy on the dips” situation, but ultimately this market is probably going to continue to see a lot of noisy behavior, so you have to be very cautious about the position size, but if we break out to a fresh, new high, then you can get a little bit more aggressive as it would show a continuation of the overall trend. After all, the Federal Reserve continues to bail out Wall Street every time it is in serious trouble, so with that being the case you have to assume that they will do so again. We are a bit overdue for some type of pullback, but that will only be a buying opportunity. If we break down below the 50 day EMA, then you could be a buyer of puts, but that is about as bearish as I would get in this market, as the manipulation will certainly be an issue down the road.
.png "Nasdaq 100")