The NASDAQ 100 has had a very strong month of October, and it is very likely to continue seeing upward pressure for the month of November. We are closing out the month at the all-time highs, after pulling back during the month of September. The 15,000 level has offered a significant amount of support, and now could be thought of as a bit of a “floor in the market.” Looking at this chart, the market continues to see plenty of “value” in this market, especially as interest rates in the United States are still struggling to keep up with inflation.
It is all the usual suspects that will drive this market higher, such as Amazon, Facebook, and the like. At this point in time, the market is likely to see plenty of buyers jumping in every time they get an opportunity, and the 16,000 level is going to be a bit of a short-term target. If we can break above there, then the market is likely to continue going much higher. Underneath, the hammer from the first week of October would be a signal that we are ready to break lower if we get below it. At that point, the 14,000 level is where the 50-week EMA comes into the picture and could drive the trend going forward. The 50-week EMA tends to be very reliable, so special attention needs to be paid attention to it.
As we are going through earnings season, we continue to get strong earnings, despite the fact that the occasional miss has occurred with technology stocks. Nonetheless, the appetite for stocks continues to be very strong, and the NASDAQ 100 tends to offer more alpha than other indices in the United States. By the end of the month, I anticipate that we will be well above the 16,000 level, with it offering a significant amount of support. As far as shorting is concerned, I have no interest in doing so, but if we were to break down below that first candlestick of the month of October, I might be a buyer of puts, but that is as negative as this market can be played at this point. Ultimately, this is a market that continues to drag other indices in the United States right along with it. The fact that the weekly candlestick closed at the absolute highs to close out the month does suggest that momentum is going to continue to throw this market higher.
