- The NASDAQ 100 has fallen rather significantly during the trading session on Friday again, mainly because we managed to continue the nasty look to the market that we had seen on Thursday.
- While it was only a little bit above 1% as far as falling is concerned, it is a continuation of very ugly price action. At this point, it’s very likely that the NASDAQ 100 could continue to take the brunt of bearish pressure.
Rallies at this point should more likely than not be in a selling opportunity, especially if we get any sign of exhaustion after that bounce. Keep in mind that we are heading into the holiday season, and liquidity could become an issue. A lack of liquidity could help short sellers, because if we get some type of negative news crossing the headlines, then it will cause a bigger move than usual. Obviously, if the market were to get good news, it could turn things back around and send this market toward the 50-Day EMA.
Market Likely to Continue Go Lower
The 50-Day EMA above could offer a significant amount of resistance, especially near the 11,600 level. That’s an area where we could see a lot of technical resistance, especially as it is sitting just below the top of the nasty candlestick from Thursday. As interest rates rise, money runs away from technology stocks, and it is probably worth noting that as we head into the end of the year, there will be a blackout period that corporations will have to pay attention to, meaning that they cannot buy their own stock, which has long been a staple of technology stocks to keep the value of the corporation up.
There might be a little bit of end-of-year markup going on in the market, but I do think that once we get through the options expiration on Friday, it’ll be interesting to see how this plays out due to the fact that the markets will be somewhat manipulated at the end of the session, as traders and brokers will have to cover bats in the options market, leaving Monday to be more of a pure measure of where the markets going to go over the next couple of weeks. It certainly looks as if there are a lot of negativities out there, and therefore I think we probably continue to go lower over the longer term.
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