- The NASDAQ 100 has gotten absolutely hammered on Thursday, dropping almost 4% by the time the afternoon came.
- The NASDAQ 100 has been crushed by the Federal Reserve and its statement/press conference during the previous session.
- Ultimately, this is a very negative sign, and it looks like we are ready to go much lower, perhaps reaching down to the 10,700 level.
The size of the candlestick is a huge negative, and the fact that we are closing at the very bottom of the candlestick is obviously a very negative sign, it suggests that we have further to go. The size of the candlestick is impressive and will almost certainly have a lot of people concerned. The fact that we broke down below the bottom of a broadening wedge also signifies that we are going lower, so at this point, I think you probably have a situation where rallies will get sold into. Having said that, Friday is a major options expiration day, so it’s hard to tell how things will play out. These days tend to be very wild, so we could see a vicious turnaround in recovery. However, that recovery is showing signs of exhaustion would be a nice selling opportunity from everything I see.
I Remain Negative
The 50-Day EMA sits just above the 11,600 level and could offer a short-term barrier. If we break above there, then it’s likely that we would see the 12,000 level above offer resistance as well, as we have formed a massive shooting star. This massive shooting star does suggest that there is a lot of resistance above, so even if we do rally from here, I won’t be looking for a buying opportunity. We also must worry about liquidity, as the market will be focusing more on the holidays than trading more than anything else. Ultimately, it looks as if we have made our decision, and now it looks like we are ready to continue the overall downtrend that we have seen for quite some time.
It’s not until the market stabilizes and then breaks above the 200-Day EMA that I would be very bullish on this market, and quite frankly I think it’s a situation where we have a lot of work to do before we can get anywhere near that type of scenario. Because of this, I remain very negative in general.
Ready to trade the NASDAQ 100 Index? Here are the best CFD brokers to choose from.