The NASDAQ 100 has broken significantly lower during the trading session on Tuesday to show signs of serious negativity, as the JOLTS number came out horribly, showing that there are over 10 million unfilled jobs in the United States. This means that there will continue to be a lot of inflationary pressures, and that of course is very important for the Federal Reserve and what it does next.
Speaking of the Federal Reserve, the Wednesday session will feature an interest rate decision, and of course, there will be a press conference that people will be listening to very closely. If the Federal Reserve sounds very hawkish, it’s likely that we will continue to see a lot of selling pressure, and quite frankly I don’t see why they wouldn’t. Inflation continues to be job number one for the Fed, and as we continue to see problems, it’s likely that the Fed will remain very tight, perhaps wrecking the stock market and the process.
Waiting for a Pullback
- The 11,000 level could be the next target and breaking down below their opens the possibility of going down to the swing low, where we had bounced from previously.
- In that scenario, it’s likely that we would see a huge flush lower, and probably a bit of panic. I think at this point, the market is showing just how negative it is, and it’s probably worth noting that the 50-Day EMA has in fact offered a bit of a short-term ceiling.
- Remember, when you are in a bear market, your biggest concern is going to be the occasional rally, which we have just gone through.
- However, if you are patient and are willing to take advantage of these types of moves, you typically fair well.
If we were to turn on a break above the 11,750 level, then it’s possible that we could go to the 12,000 level next. It’s very unlikely that we will continue to see enough pressure to the upside to make that happen unless of course the Federal Reserve comes in and shocks the system on Wednesday. Furthermore, we also have the jobs number on Friday which will cause volatility, so I think we are setting out for a bit of a pullback now.
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