- The NASDAQ 100 has been somewhat noisy and negative, but really at this point in time, I think we do have enough support underneath to turn things around and we could go looking to the upside.
- The 50 day EMA currently sits just below, and it looks like it is going to offer a certain amount of a floor in the market.
- All things being equal if the market were to take off to the outside the 20,000 level is a potential target.
On the Upside…
If we can break above the 20,000 level, then I think you have more of a momentum play perhaps opening up the possibility of a 20,700 target. All things being equal, this is a market that looks like it is trying to form some type of bullish pennant and given enough time we could break to the upside.
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Keep in mind that traders out there believe that the market is likely to continue to look for help from the Federal Reserve. And in fact, if you look at the Federal Reserve funds futures rates in the futures markets, it is supposed to be a 100 point basis point cut between now and the end of the year. That of course, would have major ramifications for the markets. People are celebrating that, but that could be a sign of risk off, so we'll have to pay close attention to that.
As things stand right now though, it certainly looks as if the NASDAQ 100 continues to be more or less a buy-on-the-dip situation, and I do think that it is probably only a matter of time before we take off to the upside, just based upon the typical behavior of this market. Because of this, I think you have a situation where traders will continue to do what they seemingly have always done – look for buying opportunities in this market. Selling is hard to do at the moment, despite the lackluster session on Wednesday.
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