- The NASDAQ 100 has initially tried to rally during the trading session on Tuesday, but at this point it looks like we just don't have the momentum to continue going higher.
- I find this interesting because we ended up farming a shooting star during the day on Monday and this tells me that we are likely to see a little bit of a pullback.
- The pullback could open up a move down to the 17,000 level, which of course is a large round number.
The 20 day EMA underneath continues to rise, and I do think it offers a little bit of dynamic support. That being said, I think this is a situation where the market remains very bullish but really there's no reason for it to go higher in the short term. A little bit of a pullback would almost certainly offer value that a lot of traders would be interested in, and the NASDAQ 100 continues to be driven by a handful of stocks, mainly seven but perhaps as many as 10. As long as the usual suspects continue to be bullish, being Apple, Tesla, Microsoft, etc., then it's likely that eventually the NASDAQ 100 rallies.
On the other hand…
However, it's probably worth noting that the markets are just overextended and of course cannot go straight up in the air forever. Any pullback at this point in time will more likely than not offer value that people are willing to take advantage of and I feel the same way. Ultimately, I think there is plenty of buying pressure underneath, and people are willing to jump in quite aggressively.
It's not until we break down below the 50 day EMA that I would even consider the uptrend in trouble. And quite frankly, I think it's somewhat obvious that Wall Street is betting on the Federal Reserve coming to bail them out with cheaper interest rates. As long as that dichotomy continues, being cheaper interest rates being higher stocks, it's likely that we will continue to see this same pattern play out. We have been in a bit of a melt up over the last couple of months and I think that continues to be the case going forward despite the fact that we may take a short term pause.
Ready to trade the NASDAQ 100? We’ve shortlisted the best Forex brokers for CFD trading in the industry for you.