- The NASDAQ 100 initially tried to rally during the trading session on Wednesday but started to drift lower almost immediately.
- This was a Federal Reserve interest rate decision day, so that of course has a major influence on what happens in the stock market.
- Keep in mind that the market has been very noisy as of late, and it’s also worth noting that we had pulled back from the 50-Day EMA as well.
Looking at this chart, I think you have a situation where the 11,000 level will more likely than not be tested. That being said, we may get a short-term bounce, but that bounce will almost certainly be sold into at the first signs of exhaustion, especially as interest rates will continue to work against the idea of venture capital going into technology. The market is likely to continue to see the 11,000 level as a potential target, and if we do break down below there, then I think we go much lower.
Volatility Ahead
The 50-Day EMA sits near the 11,700 level, and it is dropping. That should act as a dynamic ceiling in general, so I think people will be paying close attention to it and whether or not they can start selling. I am very interested in shorting but recognize that we had fallen rather hard, to begin with. In other words, there will be some people out there with a narrative to push the market higher, and of course, we have the jobs number on Friday.
Looking at this, I think we will probably try to trade in a range, but with more of a downward tilt in general. In fact, I have no interest whatsoever in buying this market, but if we were to break above the 11,750 level, then we could go higher. At that point, it would have been a very significant breakdown, but at this point, I just don’t see how that plays out. Federal Reserve Chairman Jerome Powell suggested that he was willing to continue tightening as long as needed to fight inflation. There was some noise initially, but at this point, I think it’s likely that we continue to see a lot of volatility more than anything else, and volatility typically means lower pricing over the longer term.
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