The NASDAQ 100 has rallied significantly during the trading session on Monday, as we continue to see more of a “risk on” attitude in the United States, therefore, it makes quite a bit of sense that the NASDAQ 100 has seen momentum. However, keep in mind that the market is in the midst of earnings season, so it’ll be interesting to see whether or not this can hang on to gain.
It’s also worth noting that the 200-Day EMA sits just above, near the 12,000 level. At this point, the market faces even more resistance. However, if we were to break above there, then it’s likely that we could go looking to the 13,000 level. On the other hand, if we were to turn around and break below the bottom of the candlestick for the trading session on Monday, then it’s likely that we could go down to the 50-Day EMA, which sits just below the 11,500 level. Anything below there really gets us moving to the downside.
- We are still technically in the downtrend, so you need to look at this through that prism.
- However, we are threatening to take off to the upside, so that is something that has to be paid attention to also.
- If we start to break down, the 10,600 level is an area that has been a massive support in the past, where we have formed a bit of a “triple bottom.”
Breaking down below there would show a lot of negativity, and it could send us down to the 10,000 level over the longer term. I don’t necessarily expect that to be the case easily, but we are clearly at a major inflection point on the chart, so because of this we need to pay attention to what happens next. As we are in the midst of earnings season, we have the potential for extreme volatility and therefore I’d be cautious about my position size. That being said, I would be more willing than not to add to winning positions, but I would start out rather small as the market has been so violent that it’s difficult to jump in with both feet and simply place a position.
Caution is the better part of valor at the moment, and therefore I think you need to see the market make a definitive decision before you start putting money to work. Once that money gets sore, you hopefully will get some type of clarity as to trend.
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