The NASDAQ 100 initially fell on Tuesday but has turned around to smash into the 200-day EMA. By doing so, it looks as if we are going to fight as hard as we can to get to the upside, and if we can break above the highs of the trading session on Tuesday, we could very well go looking towards the 15,000 level. It will be interesting to see how this plays out, as we are most certainly seen a lot of volatility in the markets. If volatility picked back up, the NASDAQ 100 will be one of the first places it strikes.
A breakdown below the bottom of the candlestick would kick off a “hanging man” and would be a very negative sign. At that point, I would anticipate that the market would go looking towards the 14,000 level. If we break down below there, things could get rather ugly. On the other hand, if we can take off above the $15,000 level it is very likely that we could go looking towards the 15,500 level. That is an area that has been support in the past so it certainly makes sense that it would offer resistance. The market certainly looks as if it is trying to plow higher, but there are a whole plethora of concerns out there that people are trying to focus on, and that could cause a bit of hesitation.
A breakdown below the bottom of the candlestick will probably show that we have in fact failed, and that the 200 day EMA has held. The 200 day EMA is an indicator that a lot of people pay attention to, but it is interesting to see that we focused on the upside more than the downside later in the day, showing just how much of a divergence there is between the United States traders and traders from around the world. After all, the market tends to sell off in Asia, only to see Americans focus on hope yet again. It is as if American traders do not believe that the Federal Reserve is going to be aggressive. It could certainly walk back what is been saying, but at this point in time the central bank iss still holding its stance.
