Nasdaq Forecast: Waiting for Jerome Powell

• The Nasdaq 100 is slightly weaker in early Tuesday trading, though markets remain focused on Wednesday’s FOMC decision and press conference.
• Despite near-term caution, broader economic strength and long-term uptrend behavior keep dips positioned as potential buying opportunities.

The Nasdaq 100 has been slightly negative during early trading on Tuesday, but it should be kept in the back of your mind that perhaps Tuesday really isn't indicative of what the market thinks as far as where we are going next. This is because Wednesday, of course, has the FOMC interest rate decision and perhaps more importantly, the FOMC press conference.

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But we'll be looking to see whether or not the Federal Reserve is likely to continue a long series of rate cuts, or if it's going to be very cautious going forward in what is known as a hawkish rate cut. We'll have to wait and see if that actually plays out. But I do think that one of the things that traders will have to keep in mind is that the US economy is likely to be stronger than many other economies next year. And therefore, we may have a situation where you just continue to see strength in America, but there's also a caution to the market due to higher interest rates than most people wanted. If we do pull back from here, I think we have a possibility of finding value on dips towards the 25,000 level, especially as the 50-day EMA sits there as well.

Choppiness Within a Long-Term Uptrend

But when you look at the longer-term behavior of the NASDAQ 100, we have been rallying for some time now, and until about two months ago, it was a perfect 45-degree uptrend. Now we have a little bit of choppiness. This might simply be the end of the year working off the excess froth and trying to settle things down before the next move higher. At this juncture, I don't have any interest in shorting, and I think that dips have to be thought of as potential buying opportunities.

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