The NASDAQ 100 has fallen quite significantly from the 50 Week EMA near the 13,500 level. This is a market that I think continues to see a lot of downward pressure, especially now that the market participants are finally starting to believe the Federal Reserve. After all, Jerome Powell and several other Federal Reserve governors have done everything they can to convince the markets that they are in fact going to remain hawkish, but it was not until the Jackson Hole Symposium that it looks like the message got through.
The NASDAQ 100 of course is highly sensitive to risk appetite, especially considering that the interest rate starting to rally makes a lot of these high-growth companies not as profitable. This is a market that I think could drop down toward the 200 Week EMA, which sits near the 11,500 level, and is rising. That would be a nice target by the end of the month, but if we get a rally in the short term, I look at that as an opportunity to start shorting again. After all, the NASDAQ 100 has taken a significant beating over the last couple of weeks, and it certainly seems to be yet another bounce and what is a longer-term bear market.
Buyer for Bigger Moves
It’s not unless we break above the 14,000 level that I would be a buyer of this market for a bigger move, something that I just don’t see happening anytime soon. If we break above there, that would obviously be a huge move, but this is a market that is possible of almost anything due to the fact that people are willing to ignore just about everything. It does not necessarily mean that you need to follow them. Eventually, reality comes back, and the teardown becomes rather violent.
- The market breaking down below the 11,000 level would be brutal, and that is something that we could attempt to do during the month.
- The market is likely to see a lot of fight in that area, but if we were to give that up, we could see a massive selloff.
- The economy seems to be in trouble and therefore it’s likely that we will continue to see a lot of jitters, and it’s probably worth noting that volatility in the NASDAQ has been rising, not falling.
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