Although the day was not necessarily overly negative, it is worth noting that the NASDAQ 100 formed an inverted candlestick rain and a previous support level. This suggests that it is only a matter of time before we see negativity creep back into the market, and therefore see this market test the lows again. I think it’s probably a situation where you have a lot of noise just waiting to happen, so therefore you need to understand the fact that volatility is not the friend of the stock market. This is especially true when you have technology stocks backing the majority of the move. Technology is extraordinarily fickle to begin with, and of course very rarely stands up on its own without the help of the Federal Reserve
- This market has been in a downtrend for a while, and although we have seen a rather strong move over the previous couple of sessions, the reality is that the volume has been pretty anemic at the same time, so I don’t necessarily know that you can read too much into it.
- With that being the case, I look at this through the prism of a market that is trying to do everything he can to drift lower, binds might be a bit exhausted.
We are in the midst of earnings season, so there will be some type of story that a CEO tells somebody to get them excited, but you’ll notice that every time that happens, the market fades. It’s difficult to take any forward guidance that is Rosie serious at this point, because quite frankly there’s just so many headwinds out there. How can a CEO truly know what’s going to happen next? When central bankers that have no clue. With this being the case, like fading rallies and I think that the NASDAQ 100 eventually goes much lower. How much lower I do not know yet, but it certainly seems to be more likely than not going much lower from here. The 11,000 level to very serious target, and then again the 10,500 level. I have no scenario in which I am willing to buy the NASDAQ 100 until we get the Federal Reserve away from quantitative tightening, and therefore offering the possibility of cheap and easy money like Wall Street likes. Until then, fading rallies will be what I do.
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