The NASDAQ 100 has fallen rather hard during the trading session on Wednesday, as it looks like we are ready to head down to the 15,250 level. This is an area that should be a major support level, as it had previously been a major resistance level. Whether or not the market hangs around in this area to find buyers remains to be seen, but we have to keep in mind that the 50-Day EMA underneath is racing toward that area, which should offer support as well.
If we do break down through that level, then it’s possible that the market goes down to the 14,600 level. The 14,600 level is an area that has been supportive, but I think it would take quite a bit for the market to get down there between now and Friday as the Non-Farm Payroll announcement of course will cause a lot of volatility in this market. The NASDAQ 100 is likely to continue to be noisy, but keep in mind that it’s only a handful of stocks out there that will move things, as it is essentially a market of 7 stocks, and 93 others that come along for the ride.
Overnight, we will have Amazon and Apple report, that obviously has a major influence on this market as well. If we were to break down below the 50-Day EMA, then it’s likely that the market will get a well-deserved pullback. On the other hand, if we turn around and break toward the 15,750 level, we would see a bit of resistance there as well. We are in an uptrend, and that should continue to be the case going forward, and as we are in an uptrend, you are looking for value until something changes.
The bond market will have its say as well, and I do anticipate that there is a lot of noise ahead of us over the next couple of days. However, Wall Street has a great way of selling the next narrative, so I think we’ve got a situation where eventually we will find a reason to bounce. Perhaps the jobs number may not be as troublesome as people think, or perhaps it will be something else.
Potential Signal: The NASDAQ 100 continues to be very bullish, and at this point it looks like the 15,250 level might be that opportunity to “buy on the dip” if we get down there. I’m looking for signs of a short-term turnaround to be a buyer, with a stop loss at 15,200. The target will be the 15,600 level.
