- The NASDAQ 100 bounced rather significantly during the trading session on Friday, as we have had the Non-Farm Payroll numbers released.
- The market has been very negative for some time, and it’s worth noting that the 10,650 level has been supported multiple times, and it should not be a huge surprise that we have bounced from there again.
- There is still a lot of noise above, so, therefore, it’s likely that the sellers will come back into the picture.
The 50-Day EMA sits right around the 11,300 level and is dropping. That is an area where we would see a lot of selling pressure, as it could offer a short-term ceiling in this market. Ultimately, I think this is a market that is going to continue to attract sellers on signs of exhaustion, as we continue to see a lot of trouble out there just waiting to cause issues. Ultimately, the market has a lot of noise all the way to the 200-Day EMA, which is closer to the 12,250 level, so, therefore, we need to be somewhat cautious about how things play out.
Be Patient
If we were to turn around and break down below the 10,650 level, then we could go looking to the 10,500 level. The 10,500 level is a large, round, psychologically significant figure, and a lot of people will pay close attention to it. If we were to break down below there, the bottom will fall out and it’s likely that the NASDAQ 100 will continue to take a beating. If we do take out the 50-Day EMA, then it’s likely that the move higher will be more of a grind than anything else, and quite frankly now I would look at any rally as a potential “bear market rally”, which typically ends up in a nice selling opportunity if you are patient enough.
All things being equal, a little bit of patience goes a long way, and I am looking for signs of exhaustion after a pop to start shorting again. If we don’t get that, then we are more likely than not will continue to see a little back and forth just above this support level, as we try to figure out where we are going for the longer-term move.
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