The NASDAQ 100 broke higher on Thursday as J.P. Morgan has stated there are “whisper numbers” of lower than anticipated inflation figures. Whether or not this is true is completely irrelevant, because it has manipulated the market higher. That is neither here nor there, but at this point in time it has sent the market above the 200 day EMA. At the end of the session, there does seem to be a little bit of profit-taking, and it is worth noting that there is a big gap in that general vicinity.
If we were to break higher and above the recent highs, the market could go much higher, but we need to see some type of CPI figure that is lower than anticipated. The 14,500 level should be an area of support that a lot of people will have to pay close attention to, and if we break down below there it would almost certainly send a ton of money flooding to the short side. At that point in time, we could go looking towards the 14,000 level.
The NASDAQ is highly sensitive to interest rates, as the highflyers and the high growth companies are invested in when there is a lot of cheap and easy money. However, if the CPI numbers end up causing a lot of concern, that will almost certainly work against the value of this market. Ultimately, I do think that it is probably a major day just waiting to happen on Thursday, as market participants will continue to look at this as a major inflection point. Inflation going up will cause a lot of havoc, so keep an eye on that. However, if we get a bit of a break from it, that could in fact be a very good opportunity for the buyers to take over. I do believe that you should probably be careful in the meantime, as we have seen a lot of volatility which can cause a lot of headaches. Once we do get through the Thursday session, it could be an opportunity for the markets to go either higher or lower for a bit of an extended move. Between now and then, it simply just a lot of noise waiting to happen.
