The NASDAQ 100 initially fell on Monday, but then bounced from the uptrend line that I have marked on the chart. In fact, it has formed a bit of a “tweezer bottom” over the last couple of days, so it certainly looks as if we are starting to find buyers on the dip. Furthermore, the 50-day EMA is slicing through the candlesticks, so it does suggest that we have a certain amount of technical interest in this area beyond the fact that there is a trend line there.
In addition to those reasons, the 15,500 level is an area that a lot of people would have taken notice on, and we also have seen clustering around that area anyway. Just like the S&P 500, there is going to be the idea of the “Santa Claus rally” going forward, and a lot of people will use the NASDAQ 100 as a way to try to fill out the year as far as getting returns for customers will be concerned. If we can break above the top of the candlestick from the Monday session, then it is likely that the next target will be the top of the Friday candlestick near the 16,100 handle.
To the downside, if we were to break down significantly below the 15,000 handle, then it could test the 200-day EMA which is racing towards that area. Any break of that would obviously kick off a massive selling situation, but I do not think that will happen anytime soon. Obviously, there would have to be some type of significant change in attitudes around the world, which could have been due to the omicron variant, but it is now starting to appear that the virus is not as dangerous as once thought, and that has some of that fear trade disappearing. If that is going to be the case, then it makes quite a bit of sense that the NASDAQ 100 would take off. The market could go looking towards the all-time highs again, between now and the end of the year. Obviously, we need to see some pick up, but it is still just the first week of December. At this point, I think it is very likely that we will go higher, but also recognize that it is going to be difficult and noisy.
