The NASDAQ 100 has continued to see negative pressure during the month of December, and I don’t think January is going to be much better. It looks as if the market is hanging around above the 10,500 level, and that area should offer support. If we were to break down below there, then the market is likely to get looking to the 10,000 level, which will cause quite a bit of psychological and noisy headlines. Anything below the 10,000 level probably gives people freaking out, and at that point I would anticipate that you would see this market dropping quite significantly.
The 9000 level would be the next target, followed by the 8000 level, and then the 7000 level. I don’t know that we get all the way down to the 7000 level, but it is conceivable. A lot of this will come down to just how bad 2023 is, and while a lot of pundits suggest that perhaps the recession and the monetary policy situation is going to be “slightly negative”, the reality is that the price of the stock market continues to drop regardless. It’s a matter of “watch what they do, not what they say.”
- The market is more likely than not going to see a significant amount of resistance near the 12,000 level, an area that has been resistance during the month of December.
- If we were to break above there, and as a result the 50-Week EMA, we could see this market go much higher.
- The market break above there would be a Herculean effort, and it would almost certainly start something rather big. I don’t expect to see that happen, but I suppose anything is possible at this point.
I expect noisy behavior, and I expect a lot of drama, but at the end of the day I expect a lot of negativity more than anything else. With that in mind, I’m a seller of any rally that shows the first hint of exhaustion. Furthermore, pay close attention to the US dollar, because if it starts to strengthen, that could send this market much lower as well. I do not trust rallies anytime soon, and I think that will continue to be the case for the month of January. Ultimately, the month of January could be very noisy to say the least, which of course does not help stocks.
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