- The NASDAQ 100 has done very little during the trading session on Thursday, as we wait for the jobs number on Friday.
- Quite frankly, even though the PCE numbers came out lighter than anticipated, the rally was short-lived.
- In fact, it’s a bit concerning that the bulls get everything they want, yet don’t have any momentum. That’s going to be the case, the jobs number suddenly became that much more important.
Quite frankly, Wall Street was once a poor job number because it means more likelihood of cheap and free money for them. Loosening monetary policy is the only reason Wall Street has made money over the last 14 years, and that’s the only way they know how to do so these days. With that being the case, it’s very likely that we will continue to see a “bad news is good news” type of attitude.
Waiting for Santa Claus Rally
Furthermore, we have the nonsensical Santa Claus rally coming, which is at the end of the year when money managers market their books in order to try to convince clients that they’ve done the right things this year. It may sound cynical, but if you look at history, it shows up in the charts almost every time. The most recent time it didn’t was in 2018, and that was a bit of a doozy.
Looking at the chart, we are stuck between the 50-Day EMA underneath in the 200-Day EMA above. That typically means that you are getting relatively close to some type of squeeze, and therefore a bigger move could be coming rather soon. That probably will be in reaction to the jobs number, and quite frankly the jobs never come out hotter than anticipated, I could see the NASDAQ 100 take a bit of a beating. Furthermore, it’s probably worth stating again that the fact that we didn’t do much during the day on Thursday, despite the fact that the Core PCE numbers suggested that inflation was going suggests that something is not quite right under the surface.
Nonetheless, let’s see how it closes for the week before we put any real money to work, because quite frankly this is an area that could be the precipice of something either really bullish, or we could pull apart. After all, the US dollar looks like it’s on the precipice of either falling apart or recovering quite strongly.
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