- As I write this analysis, we are in the midst of freaking out about the new auto tariffs being levied by the United States.
- That being said, we also have already sold off quite drastically over the last couple of weeks, so one would have to think that sooner or later the buyers will show up.
- The question of course is going to be when will they?
This is the hardest part of the analysis going into the month of April, because we are waiting to see what the next tweet is to determine what to do. Eventually, Wall Street will learn to ignore the president, because we’ve already seen that play out during the first administration. However, in the meantime it will be more drama than you have in your typical American high school. Because of this, the NASDAQ 100 will be particularly difficult, because it is by far the most volatile index that most of us trade.
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I think that if we can get a week where we stay above the 20,000 level on a close, that could be the sign that we are in fact going to rally. Regardless, I have no interest in shorting this market, because it is not equally weighted, meaning that just a couple of stocks can make it go higher. Remember, that’s what most of you love about this index is that just a couple of companies can make all of the difference. It works in both directions, as we have seen in video get hammered, the NASDAQ 100 suffered as well.
A lot of this is going to come down to interest rates, and whether or not they start rising rapidly. If they do that tends to work against technology companies such as the one you find in this index, and therefore you need to keep an eye on the bond market. If interest rates start to fall rapidly, or perhaps the Federal Reserve signals that it’s going to start cutting rates aggressively, then the NASDAQ 100 will be the place to be. Regardless, this is a very dangerous time in this index, and I don’t think it’s going to get any better anytime soon.
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