The NASDAQ 100 as rallied significantly during the trading session on Friday, as the 11,000 area has offered support. Ultimately, this is a market that I think will continue to see a lot of volatility, but at this point I think it is only a matter of time before we see sellers come back into this market as we are in a major downtrend. Keep in mind that the NASDAQ 100 is very sensitive to interest rates, and those interest rates of course are going to be very high going forward.
The 50-Day EMA sits right around the 11,750 level and is dropping. I think that probably offers a bit of technical resistance if we do continue to go higher, but at this point I think it is a bit of a fantasy to think that stock markets are going to continue to go much higher, as the risk appetite is just simply dead at this point. If we were to turn around break down below the 11,000 level, then it’s likely that the NASDAQ 100 continues much lower.
Keep in mind that the NASDAQ 100 is influenced by just a handful of companies, and Tesla has already shown itself to be wanting. Ultimately, we also have a lot of social media platforms looking vulnerable, but it’s possible that part of the rally during the day had to do with the fact that there was a comment coming out of the German energy minister that the EU has made progress on setting up talks to keep energy prices down. Whether or not they actually do anything is a completely different story, but at this point anytime we see some type of positivity, the market reacts, and kind as there has been nothing but negativity over the last couple of weeks.
- I think any time you get a short-term rally that show signs of exhaustion, need to start selling.
- All things being equal, it would take a huge shift in the overall financial outlook and central bank actions to have me buying the NASDAQ 100.
- That’s not to say that we won’t get a bit of a bounce, it’s just that that bounce is going to be the typical recovery in a longer-term downtrend.
- Overall, I think we still have much further to go before things turn around.
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