- The NASDAQ 100 has drifted lower ahead of CPI numbers coming out on Thursday, as Tesla has been eviscerated again.
- Tesla is one of just a handful of companies that matter when it comes to the NASDAQ 100, which is why you need to be careful about your position sizing in this index, because you are essentially only trading a handful of stocks.
- It is not an equal-weighted index, so you can’t just look at the entirety of the market decide which direction to trade. You need to be aware of what’s going on with Microsoft, Apple, Google, Facebook, Tesla, and a few others.
Now that we are back below the 11,000 level, it’s likely that we will continue to go lower. I think it’s probably only a matter of time before we test the 10,750 level. Furthermore, the CPI numbers coming out during the day on Thursday will have a lot of people paying close attention to what the Federal Reserve may do, as inflation rising has been like a dagger to the heart of technology stocks. If the Fed is likely to continue raising rates, I just don’t see how the NASDAQ 100 does well.
Looking to Short this Market
One of the things that stock traders have been running away from our profitless technology companies, and of course we have recent announcements from Meta (Facebook) that they are laying off thousands of employees, mainly due to the foolish behavior of Mark Zuckerberg. He continues to press the issue overall “Metaverse”, convinced that everybody’s going to run around like a bunch of morons with huge glasses on. The reality is probably quite a bit different, and therefore we may have seen a major turnaround in the fortunes of that company. (Let’s hope so.)
All, we are decidedly in a downtrend and that’s really all that matters. The 50-Day EMA is close to the 11,500 level and drifting lower. Any rally now will almost certainly run into exhaustion that will start selling it off again if we even get a rally. With that being said, I like the idea of shorting and have no interest whatsoever in trying to buy this market because quite frankly I think we are so far away from any type of sustainable rally that it makes it all but impossible.
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