The NASDAQ 100 fell hard again Friday as inflation numbers in the United States came and went. The announcement was very strong, and it’s likely that we will continue to see technology stocks get hammered, which will weigh upon the NASDAQ 100. The market had tried to break above the 13,000 level but pulled back rather significantly from the 50-day EMA. Ultimately, this is a market that will be looking at the 11,600 as an area of support. If we could break it down below there, then it’s likely it will continue to go much lower.
If we do rally from here, then it’s likely that we will find sellers above yet again, as there’s no real reason to think that inflation is going to slow down, despite the fact that Wall Street had convinced itself that the rate of change of inflation was slowing down. In fact, one of the few things that kept the market somewhat afloat was the fact that the market had to close for the weekend.
Any rally at this point in time will end up being a selling opportunity, and I think we very well could see the NASDAQ 100 reach down to the 11,000 level. The NASDAQ 100 has been in bear territory for a while, so we should continue to see a lot of negativity. Given enough time, if we were to rally, I think the only move that would change attitudes toward the market would be if the Federal Reserve were to change its attitude, and perhaps even the NASDAQ 100 break above the 50-day EMA. Even then, there is a lot of noise between the 13,000 level and the 13,600 level. In other words, I think it’s going to continue to be a negative market that will be worth taking advantage of.
Eventually, there will be a bottom. However, we are nowhere near it at the moment, as the Federal Reserve continues to go on a tightening phase, as inflation is so high they don’t really have much of a choice. The best-case scenario might be going sideways, but even that seems like it’s probably asking for a lot considering the sentiment and the behavior of traders overall. Technology stocks need low interest rates to attract growth-oriented traders, so this index is going to struggle.
