- The NASDAQ 100 has rallied just a bit during the trading session on Friday to slow the bleeding as it were.
- Ultimately, this is a market that I think continues to see a lot of noisy behavior, but I also recognize that the 50-Day EMA holding during the Thursday session was a very bullish sign.
- After all, this is a market that I think continues to see a lot of noisy attitude, and therefore I think we’ve got a situation where you have to be cautious with your position sizing.
Having said that, this is a market that will continue to favor the upside, and I think that the 50-Day EMA will continue to offer support as well. If we can break above the 15,500 level, then I think the market can continue to go much higher, perhaps opening up the possibility of a move to the 16,000 level. Short-term pullbacks continue to offer buying opportunities, and if we can stay above the 50-Day EMA, then it’s likely that we continue to go higher. If we do break down below the 50-day EMA, then it is possible that we could go looking at the 14,600 level.
Volatility Ahead
All things being equal, expect a lot of volatility as traders are coming back from the summer holiday, therefore it does make a certain amount of sense that we would see volatility pick up as volume picks up. If we can break above the recent highs, then I think there will be a bit of a “FOMO trade”, and historically speaking, late in the year you quite often see that. I think that we also have the possibility of a deeper correction, but the index is built to rise over time.
The question now is whether the same leaders can jump in and make a lot of noise. With that being the case, I think you need to be cautious with your position size, but you could very well see potential trouble along the way. I think we eventually go higher, but I like the idea of trying to find value along the way. It will be interesting to see how this plays out, but keep an eye on Apple, Google, and all of the usual suspects to find out where we go next.
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