- The NASDAQ 100 fell during the trading session on Tuesday as traders continued to price in the idea of a slowing global economy.
- Ultimately, this is a situation where you will continue to see selling pressure, but we are getting relatively close to an area that has offered a bit of a bottom.
- Because of this, I think we got a scenario where we could get a short-term bounce, but quite frankly, I think a lot of that comes down to the idea of the adults not being involved.
This year, retail traders bat the market back and forth, as most of the larger traders simply are not involved. Because of this and the lack of volume, you can see the markets move around a little bit erratic, but one thing is for sure, if there’s some type of major news event, the markets can take off in one direction or the other. I do not expect that, and I think a lot of people will be waiting to see what the jobs number has to say about the global economy and the US economy early in January.
Avoid Trading this Market
In the short term, a bounce to the 11,200 level is very possible, but in that area, I would expect to see sellers jump back in. The 50-Day EMA sits just below the 11,500 level, and I think that comes into the picture also. This is an area that would attract a lot of selling pressure also.
On the downside, if we break down below the 10,700 level, then for the next 300 points and on every 100-point interval, you will see buyers’ commitment try to pick this market up. If we break down below the 10,400 level, you could see the NASDAQ 100 unwinds of the 10,000 level rather quickly. Either way, the lack of liquidity means you probably shouldn’t be trading this market. If you do choose to do so, recognize that there might be a little bit of the year squaring of books going on at the moment that makes the price action somewhat meaningless, so you cannot read too much into how the market moves unless it makes some type of impulsive move, based upon some type of fundamental driver. At this point, I just don’t see that happening between now and Non-Farm Payroll numbers.
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