- The NASDAQ 100 has fallen a bit during the trading session on Thursday, as we have broken below the 50-Day EMA.
- At this point, the market looks as if it is ready to continue the overall downturn, but I also recognize there is a lot of noise out there, especially considering that the earnings season is currently going on in the United States so that obviously would have a major influence on what happens next.
- It’s worth noting that earnings so far have not been impressive.
If we were to break down below the 11,300 level, then I think the NASDAQ 100 could drop down to the 10,650 level, although it probably will take some time to get down there. The candlestick from the previous session, that being Wednesday, ended up forming a bit of a shooting star so I do think that we have a situation where the trendline is still being paid close attention to, as it has been so instrumental over the last several months.
Buyers are Starting to Run Out of Momentum
I would expect a lot of noisy behavior, but I still like the idea of fading short-term rallies to show signs of exhaustion, because I do believe there is a lot of noise above that should continue to be a major signal as to where we are going next. In fact, even if we do break out to the upside, I think that once we get above the candlestick from Wednesday, then it’s possible that the market could go to the 200-Day EMA, which is sitting just above the 12,000 level. Obviously, that is a very bullish move, and it would attract a lot of attention. However, it does not look like we have that much in the way of momentum now.
Keep in mind that there are a lot of moving pieces out there right now, and as a result, the NASDAQ 100 will show quite a bit of indecision at times. Nonetheless, we are still very much in a downtrend, and I do think that continues to be the case going forward. If we were to break down below the 10,650 level, that would be extraordinarily negative. I don’t think that happens in the near term, but clearly, the buyers are starting to run out of momentum.
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