- The NASDAQ 100 has been trading and arranging for the last couple of months, and the month of April could very well see the same. It does look like at the very least the buyers are trying to make some noise in this market.
- However, it’s not until the market breaks above the 14,000 level that one can say that we have truly chewed through a major area of resistance.
- While the 13,000 level of course has been the one area that we have tested multiple times over the last couple of months, it’s worth noting that we recently had a bit of a “throw over” to reach the 14,000 level.
If we turn around and break down from here, is very likely that we could go down to the 12,000 level, maybe even down to the 11,000 level. This is more likely than not going to be an area that continues to hold, but if we were to break down below 10,500, then the market could really fall apart at that point, testing the 10,000 level. The 10,000 level obviously would be a psychologically important barrier, and anything that breaks the market below there could really send it into a tailspin.
Wall Street “group think” dictates that some of the bigger stocks in the NASDAQ 100 continue to be favorites of fund managers, regardless of how they perform. With that being the case, I think this is a market that is more likely than not going to go sideways for the month than anything else, but I do favor fading rallies as we continue to see a lot of overhead problems. While I favor fading rallies that show signs of exhaustion, I also recognize that during the month of April, we will probably see a couple of short-term oversold conditions that send the market back to the upside. In general, this looks like a market that is going to stay basically where it’s at, and I don’t expect a whole lot of momentum unless, of course, we get some type of big macroeconomic event.
Pay attention to the Federal Reserve, because it looks like they are getting somewhat close to the end of their hiking cycle, but they also plan on staying tight for quite some time. Perhaps it’s much longer than the Wall Street traders believe, so with that being the case, it could cause quite a bit of a headache for the bulls.
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