The NASDAQ 100 has been rather choppy during the month of October, as we continue to see a lot of noise in the technology sector. Keep in mind that tight monetary policy typically works against technology, and of course we have seen rather miserable earnings reports from giants such as Alphabet, Amazon, and Meta. When the market is not equally weighted, some of the bigger companies can really drag things down.
The 11,000 level underneath is supported, and if we were to break down below there it’s very likely that we could go down to the very bottom. Breaking down below the bottom opens up the possibility of a much bigger move to the downside, perhaps sending this market reeling and going down to the 10,500 level, and then eventually the 10,000 level.
If we do rally from here, it’s likely that we will continue to go higher, perhaps trying to reach the 50-Week EMA. All things being equal, this is a market that I think will continue to be very noisy, and with the Federal Reserve having an interest rate decision at the very beginning of the month, it won’t take but a couple of days to see volatility packed back up. The market could then open up for a much bigger move, especially if Jerome Powell shocks the market. For what it is worth, right now it looks very likely that a lot of traders are out there banking on him raising rates in November, but then suggesting that the Federal Reserve is going to slow down or even pause. That obviously has a lot to do with where we go next, and right now it looks like a lot of people are trying to bet on the idea of a turnaround. If they don’t get that, we could see this market get absolutely crushed, and we could break down through the bottom.
- Given enough time I think that could happen, if for not the Federal Reserve, for plenty of other reasons out there, including being global economy in and of itself.
- There’s really nothing to get excited about right now from a bullish perspective, so it’s a bit surprising that the market is betting in this direction yet again.
- This shows just how much Wall Street can do as far as spending a narrative in getting everybody worked up.
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