- The NASDAQ 100 has seen another massive selloff during the trading session on Thursday, dropping over 3% as we continue to see a lot of negativities and “risk off behavior” out there.
- After all, the Federal Reserve has reiterated its desire to keep interest rates higher, and therefore it’s likely that we would see technology start losing again.
- The market will react to tight monetary policy, and the ability or inability of venture capitalists to put money to work.
We had recently broken out of a megaphone pattern, pulled back to it, and then failed again. At this point, the market is likely to drop down even further, perhaps testing the bottom. Quite frankly, am a bit surprised that it happened this quickly because I was anticipating this might be a move early next year. However, it’s obvious that the markets are getting jittery at this point, and I think we may see a selloff into the holiday. Furthermore, next week is the week between Christmas and New Year’s Day, so there will be a significant lack of liquidity.
The market is Ignoring the Federal Reserve
Short-term rallies will continue to be sold into, and I believe that the 50-Day EMA above will offer a significant amount of resistance. The 11,540 level is where it is sitting, but it is dropping and therefore it’s a bit of a dynamic trendline of sorts. The market breaking above there would of course be very bullish, but I just don’t see that happening anytime soon. This is especially true considering how negative the market was during the Thursday session, as we have wiped out the attempt to recover from the bottom.
Looking below, I think the 10,500 level is important, but I think we probably break down below there as well. Quite frankly, the economy is heading to a very bad place, and the NASDAQ 100 almost certainly will express that reality. It’s a bit ironic because we continue to see the same scenario: Wall Street convinces itself that the Federal Reserve is going to loosen monetary policy, and then must be reminded by Jerome Powell that the Federal Reserve is nowhere near doing that. At that point, the market sells off again, and therefore it’s likely that we will continue to see this nonsense play out as Wall Street always seems to reach for some type of reason to get bullish.
Ready to trade the NASDAQ 100 Index? Here are the best CFD brokers to choose from.