A lot of choppy behavior in the short term is to be expected, and if we rallied on Tuesday, I would anticipate that is just going to open up a nice opportunity to get involved again.
- The NASDAQ 100 has gone back and forth during the training session on Monday in the very thin electronic trading via the futures market.
- That being said, the actual index itself was not trading as it was Labor Day and the United States.
- The market is sitting just above the 12,000 level, and it’s likely that the market could go looking to break down toward the 11,000 level.
The 50 Day EMA sits near the 12,700 level, and therefore it’s likely that we could see a lot of noise at any rally. I am looking for signs of exhaustion that I can start shorting because the NASDAQ 100 is going to get pummeled in an environment where interest rates continue to rise. Risk off type of trading is going to continue to cause major issues, and therefore I think we have a situation where the NASDAQ 100 will be a bit of a punching bag.
Market Awaiting Volatility
If we do just simply break down below the 12,000 level, it’s likely that we continue to see a lot of choppy negative behavior, and therefore I think the 11,000 level will eventually be the target, but it may take a while to get there. Picking down below that level could open up quite a bit of significant downward pressure as well. A lot of choppy behavior in the short term is to be expected, and if we rallied on Tuesday, I would anticipate that is just going to open up a nice opportunity to get involved again.
It is not until we take out the 13,200 level at the very least that I would consider buying, but ultimately this is a market that I think has far too many issues to simply climb to the upside. Ultimately, this is a market that I think will continue to see a lot of volatility, so therefore we need to see position sizing done appropriately, as shown in a market is a bit more dangerous than buying it. You should also keep in mind that the NASDAQ 100 is also influenced by just about 7 stocks, so you need to pay attention to all of the usual actors such as Tesla, Microsoft, Amazon, and the like. I have no interest in buying this market anytime soon, but I do recognize that we could be more of a “fade the rally” situation.