- The NASDAQ 100 of course was closed during the trading session on Monday, but as we start to look towards the market reopening, the volume will pick up and traders will start to have to make some decisions.
- The market will continue to look at the 10,650 level as support, as we have bounced a couple of times.
- I do expect that we could see a little bit of a turnaround, perhaps drifting as we hang around waiting for the Non-Farm Payroll announcement on Friday.
The shape of the candlestick on Friday is a hammer, so therefore it suggests that we could see a little bit of a bounce. The 50-Day EMA is near the 11,400 level and dropping a bit. Ultimately, this situation should offer a bit of a short-term ceiling, as we had seen a megaphone pattern in that general vicinity previously. The market continues to be very noisy, but I do think that we need to look at this through the prism of a market that might be oversold, but stocks have been following that would momentum for a while.
Waiting for a Short-term Bounce
If we were to break down below the 10,500 level, that would be very negative, perhaps opening the possibility of a move down to the 10,000 level. If we break above the 50-Day EMA, then it’s possible that we could go looking to the 200-Day EMA, which is closer to the 13,250 level. I don’t think that happens very easily, but it is something that you must keep in the back of your mind just in case.
As the Federal Reserve continues to be tight with monetary policy, technology-based stocks will continue to struggle, and therefore it makes a lot of sense that we would see the NASDAQ 100 look a bit soft and perhaps open selling opportunities on signs of exhaustion. Ultimately, I have no interest in buying this market in the short term, but if we did break above the 50-Day EMA, we may see a little bit more of a move to the upside. Anything above the 200-Day EMA could didn’t really start to let this market take off to the upside. More likely than not, I think we have a short-term bounce that will get sold into, that we can take advantage of.
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