- The NASDAQ 100 initially started to look like it was going to break down significantly last week, but Monday was a nice bounce.
- At this point, I think it’s probably only a matter of time before the sellers come back, but now it looks like we have a little bit of a relief rally going on.
- The relief rally does make a certain amount of sense at this point, because we just dipped below a massive low, but I think that it’s only a matter of time before we see sellers come back since all the problems are still out there.
After all, the US economy is almost certainly going to head into a recession, and that of course will have a major influence on corporate earnings. The NASDAQ 100 is only driven by a few handfuls of companies, so all the big names should be watched. The market has been very bullish for the trading session on Monday, and we could have a little bit of follow through, but I think the reality is that the upside is going to be limited since it’s only a matter of time before something bad drops across the newswires.
NASDAQ 100 Likely to Keep Drifting
The 12,000 level above is what I think would be the ceiling, but I don’t even think we get to there. The 50-Day EMA is sitting in the same area and dropping quite drastically. On the other hand, if we break down below the 11,000 level, then the NASDAQ 100 will continue to drive to lower levels. Surely there are fools out there buying this because the market is getting bullish for the day, but this is not the bottom.
Because of this, think it’s probably only a matter of time before something spooks the market, and even if the market does rally from here, it will only offer a better shorting opportunity. In general, this is a market that I believe will continue to be volatile at best, so keep that in mind. I did not buy the NASDAQ 100 during the session but will let the thing bounce to take advantage of the overall malaise in the market. Signs of exhaustion on a daily close will be jumped on quickly.
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