- The NASDAQ 100 has rallied about 1% during the trading session on Monday, as we are hanging around the 11,000 level.
- Keep in mind that the NASDAQ 100 is heavily influenced by a lot of the major technological company such as Tesla, Microsoft, Amazon, Google, and the like.
- Ultimately, it is very sensitive to interest rates, so if we do see rates rally a bit in the United States, then it’s likely that we will continue to see the NASDAQ 100 struggle.
If we do continue to go higher, then I’m going to be paying close attention to the 50-Day EMA, which is currently sitting near the 11,500 level, and dropping. Beyond that, we also must look at the 11,750 level, which also has been structurally resistant. I think at this point, a lot of people were looking at this through the prism of a potential “double bottom”, and a lot of people are hoping this is the bottom finally. It’s difficult to think that is going to happen anytime soon, so I’m looking for rallies now to show signs of exhaustion that I can take advantage of. If we do break above the 11,750 level, then it’s possible that we could go much higher, but I think that is going to be the hardest way to go.
Waiting for a Shorting Opportunity
If we break down below the double bottom, then it’s likely that we could continue to see a massive selloff, probably something along the lines of a meltdown. At that point, I’d be looking for the NASDAQ 100 to hit the 10,500 level, followed by the 10,000 level. At this point, it is very unlikely that we continue to see rallies be able to stick, mainly because there’s so many negative things out there. With that being the case, I think it’s only a matter of time before you get a nice shorting opportunity.
If we did take off to the outside, then we would need to see some type of Federal Reserve action, or perhaps slowdown in its aggressive monetary policy to make a rally mean anything, so therefore it’s likely that we would continue to see it as a bit suspicious until the Federal Reserve gives the “all clear.”
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