The NASDAQ 100 has been very quiet during the trading session on Monday, as we continue to wait to see whether we can truly take off to the upside. It’s worth noting that the market has been very bullish over the last couple of previous trading sessions, but Monday has a completely new focus.
The first thing that NASDAQ traders will have to pay attention to is the fact that the Federal Reserve has a major interest rate announcement and perhaps even more importantly, a press conference coming out on Wednesday, which will have a lot to do with what risk appetite is like in the United States. After that, Thursday features of the European Central Bank doing the same thing, and eventually we have the Non-Farm Payroll number coming out on Friday. Ultimately, this is a market that will be very quiet for the first couple of days this week, and then very likely will be choppy for at least 3 days.
Underneath, the 50-Day EMA sits at roughly 12,800 and is rising. That’s the bottom of the overall consolidation that the market has been in for a while, so I think it makes quite a bit of sense that it offers a little bit of a floor. Anything below that level would almost certainly open up fresh selling, which would make a certain amount of sense because not only do we have a little bit of an overstretched condition, but we also have a major earnings report coming out. The most obvious one of course is going to be Apple on Thursday, which is a major component of this index.
I’m not interested on Shorting this Market
- On the upside, if we were to break above the last couple of candlesticks handily, then we could go looking to the 13,500 level.
- Ultimately, this is a market that will continue to be very noisy in general, but that’s nothing new for the NASDAQ 100, as it is one of the more volatile major indices out there.
- Ultimately, we are getting close to a bigger move one way or the other, but in the meantime, I would expect to see a lot of choppy behavior, and therefore it would make quite a bit of sense that we would see this type of noise and of course, a certain amount of caution needs to be taken in this type of environment.
Potential signal: The NASDAQ 100 has been stuck in a range for quite some time, and it’s very likely to stay there, at least until we get some of these major announcements out of the way this week. I would be particularly interested in buying a debt that comes anywhere close to the 12,800 regions, with a stop loss at 12,700. This would be a simple play for a “buy on the dip” trade, aiming toward the 13,100 level.
Since this week could be particularly volatile, it would be advisable to trade a smaller-than-usual position. As far shorting is concerned, I’m not interested in doing so until we get all of the macroeconomic data out of the way.
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