- The Nasdaq 100 has been fairly bullish during the day, gaining almost one and a half percent as I record this.
- But we also have to keep in mind that we are bouncing from an extremely oversold level.
- Because of this, I think you have to wonder whether or not this is going to be a short-term bounce or if we're going to see something more interesting.
We are down about 14 and a quarter percent at this point from the highs. So, a bounce had to happen. My question about this market is going to be whether or not we find resistance at the 20,000 level, assuming that we even get there. There are a lot of things that are working against NASDAQ 100 at the moment, not the least of which will be stubbornly high interest rates.
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Interest Rates Have Fallen
Yes, they are lower than they once were, but ultimately you still have a situation where inflation, although cooler than anticipated via the CPI numbers on Wednesday, is still stubborn and it's still not quite enough to get the Fed to start cutting. In fact, a lot of the leading indicators forecast that we might have a little bit of a tiny recession in the United States turning around to only have more inflation.
If that's the case, it's going to keep the Fed from cutting as much as Wall Street typically looks for. All things being equal, though, I will look at the 200 day EMA, which is just above that 20,000 level as a bit of a major barrier that we must overcome in order to get overly bullish. I think at this point in time, the close at the end of the day here, about an hour will be crucial.
And if we were to turn around and break down below the 19,129 level, we could see the NASDAQ really fall apart. At that point, we could see a move down to the 18,500, possibly the 18,000 level. Either way, trying to pick the bottom is a very difficult thing to do. And therefore, you need to let the market prove itself to you before you put any serious money to work.
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