The NASDAQ 100 went back and forth on Tuesday as we are trying to stabilize. That being said, the market has fallen quite significantly, so that might be a good time for a little bit of a relief rally. That being said, a relief rally is going to get sold into unless the Federal Reserve suddenly changes its attitude. I would not hold my breath for that, as there are far too many reasons to think that we will continue to see destruction.
Looking at this chart, I believe that if we do rally, the 12,000 level will be difficult to overcome, especially if the Federal Reserve looks as hawkish as it has in the past. Granted, there will be people on Wall Street trying to pump the narrative that perhaps we have an opportunity to see the Federal Reserve slowing down. That seems to be a pipe dream, but you must keep in mind that the majority of traders on Wall Street have never had to deal with an inflationary environment. Most of them have no idea what to do and assume the Federal Reserve will come to save them. The Federal Reserve has a much bigger problem, and that’s inflation. Inflation in the United States is essentially out of control at this point.
Looking at this chart, it’s very likely based on the long-term charts of the NASDAQ 100 that it could go down to the 11,000 level, perhaps even the 10,000 level. Ultimately, I think that’s where we will go, and I think there are a lot of people looking to get involved in that area. Regardless, risk appetite is something that I would not be involved in right now, as we have seen not only in stock markets, but crypto markets, currency markets, and just about anything else. Ultimately, any bounce at this time is an invitation to take advantage of a collapsing market. If we can somehow break above the 50-day EMA, then it might be possible that we could go higher, but I don’t think that the momentum is there, and unless something changes from a longer-term fundamental standpoint, I just don’t know how this gets better. That doesn’t necessarily mean that the market is one you can jump into and start shorting at any moment, so make sure you pick your spots.
