The NASDAQ 100 initially tried to rally on Tuesday but continues to see a bit of trouble. The 13,000 level has offered resistance, and at this point, it’s likely that we will continue to see a lot of “market memory” in this area, as it has been an area of both support and resistance multiple times over the last several years.
Now the market is sitting on the 50-Day EMA, and if we break down below the 50-Day EMA, then we could see a continuation to the downside, reaching the 12,500 level, possibly even the 12,000 level after that. Keep in mind that the NASDAQ 100 is only driven by a handful of stocks, so we will have to pay close attention to the company such as Tesla, Amazon, Alphabet, Microsoft, and the like. It’s also worth noting that the NASDAQ 100 is highly sensitive to interest rates, so pay close attention to the 10-year note. If interest rates continue to rally, that will have a negative effect on this market given enough time.
Market Waiting for Central Bankers Symposium
- Central bankers are speaking to Jackson Hole this week, and that could give market participants a bit of a “heads up” as to where monetary policy is going.
- That’s a bit surprising to say because the Federal Reserve and other central bankers have discussed the need to type monetary policy in order to fight inflation repeatedly. However, it’s worth noting that Wall Street is currently at the end of a 14-year stretch of easy money, as the Federal Reserve has done everything it can to prop up its friends on Wall Street.
- The Federal Reserve officials don’t day trade anymore, so perhaps they will actually let it go.
It's not until we make a fresh, new high that we would see this market go higher, perhaps reaching the 15,000 level. That would take quite a bit of momentum, so at this point in time I suspect is easier for this market to pull back in the short term. However, we will have to see where we end up at the end of the week before we get any type of serious clarity. In the meantime, keep very calm, and make sure that you are not overtrading nor are you using huge positions.
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