The NASDAQ 100 continues to look healthy, and the fact that we have both Amazon and Apple earnings coming this week, we could have a big move in this market. It’s obvious that people look at this as a “buy on the dips” scenario, and therefore I think it’s the safest way to play this market, buying those dips.
Underneath, I see the 15,250 level as a major support level, and I think at that point we would have to ask serious questions if we were to break down. However, the 50-Day EMA sits just underneath there, and it almost certainly will come into the picture as well. In other words, there are far too many reasons to think that this market is going to go higher to get cute and try to short it at the moment. That being said, I think this is a situation where you continue to see a lot of noise more than anything else, so you don’t want to get overly exposed. However, you can buy on dips and start to add to your position as the NASDAQ 100 moves in your favor. Because of this, I think that if you are cautious and pay close attention to the big names, you can continue to benefit from what has simply been a momentum play more than anything else. Yes, a lot of people are excited about artificial intelligence, and whether or not it is something that is profitable quickly remains a question to be seen, but it seems at this point people just want to buy technology stocks, as demanding more yield becomes more of an issue.
If we were to break down below the 15,000 level, then I can start to rethink the entire picture, but right now it seems very unlikely, and it certainly would take some type of major turnaround in not only momentum, but the overall attitude of the markets to make that happen. Ultimately, I think we continue to rise from here.
Potential signal: I am still bullish of this market, despite concerns about the actual economy. The narrative still drives things. The market is “buy on the dips”, with particular interest in the 15700 level. I would have a stop at 15240, and aim for 16000, where I would move stops to breakeven. The final target is 16300.
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