- The Nasdaq 100 has rallied a bit during the early hours on Monday, as perhaps there's been a big sigh of relief that the Middle Eastern conflict hasn’t expanded.
- That being said, I think we are still very much in a consolidation area, and that is an area that I think a lot of people would pay close attention to.
- This market will continue to move on the handful of major stocks that everyone owns.
- Nonetheless, this market is in an uptrend, and people will continue to see buyers ahead. Remember though, this is earnings season, so volatility could be an issue overall.
We had so much in the way of a massive uptrend that working off some of that excess makes sense. Furthermore, we also have the idea that the earnings season is currently kicking off and that obviously has an influence on stocks. But regardless, the big driver, of course, is going to be the Federal Reserve and its monetary policy. Fed watching is by far the most important thing that traders can do at this point in time. Earnings may have an effect, but longer-term it is still about the interest rate situation.
This Market Has Support
At this point, it's likely that we could see a situation where, any dip I think gets bought into the 17,775 level should continue to be support right along with the 50 day EMA. So as long as we can stay above all of that, I think we're going to continue to see choppiness, but overall, more leaning towards the upside.
If we can break above the 18,500 level, then it opens up a much bigger move in the Nasdaq 100 and I think eventually will go looking to the 20,000 level. I'm not necessarily expecting that right away. but I certainly would not be surprised by it as the trend has been so strong up to this point. A breakdown below the 17,775 level could lead to a deeper correction, but, that won't only end up being a buying opportunity down the road.
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