The NASDAQ 100 has had a horrible day on Thursday as we continue to worry about geopolitical issues, and a flight to safety has been in order. We are closing at the very bottom of the candlestick, now looking to test the support underneath. It will be interesting to see how this plays out, but it is obvious to me that the NASDAQ 100 is a very dangerous place to be buying at this point.
You could make an argument for a little bit of a bearish flag, but quite frankly I do not even know that I would overcomplicate it at this point. You can also make an argument for a “H pattern”, which is also a bearish formation. In fact, I do not see a positive formation at this moment. If the NASDAQ 100 cannot hang on to the 14,000 level, I think the bottom falls out and we go much lower. We are on the precipice of something rather large, but that does not mean that it has to happen today.
As far as buying is concerned, I have not done that for a while, and I certainly do not have any interest in doing it heading into the weekend. The 200 day EMA currently sits at the 14,875 level and is starting to slope lower. I do believe that ultimately, we will have to make a bigger decision, but right now it looks as if we are going to go much lower. With this being the case, I have no interest in buying anytime soon and I do think that I will continue to buy puts as we go forward. I do not short US indices due to the fact that they are heavily manipulated to say the least. Ultimately, this is a market that could turn around once the Federal Reserve realizes they need to save their friends on Wall Street. I know that sounds cynical, but all one has to do is pay attention to what has been going on for the last 13 years to know that is a scenario we trade in.
The one thing you can count on is a lot of volatility, so your position size will be crucial. The high leverage the futures markets can offer can also be a major detriment to your account, so please be careful.
