- The NASDAQ 100 rallied rather significantly during the month of June, and therefore it looks as if we are testing a major breakout.
- It’s worth paying attention to the 15,250 level because it is an area that has offered significant resistance recently, and historically speaking it has been important.
- That being said, you should pay close attention to the fact that the market may be running ahead of itself.
It’s Just 7 Stocks that Move the NASDAQ
We have gone somewhat parabolic but is also worth noting that there are only about 7 stocks that account for about 30% of the overall value of the NASDAQ 100. Because of this, you need to be aware of what’s going on with Tesla, Adobe, etc.
At this point, it looks like everybody is running with the “AI” narrative. That is one thing that Wall Street is really good at, coming up with a new narrative to sell stocks to people. Remember, that’s their job and therefore you have to be cognizant of the possibility that we are in a bubble. In fact, we have been in a major bubble for several years now, and we have seen it bust in various assets. As it stands right now, the NASDAQ 100 still is performing quite well. However, it seems like the market wants to jump into one asset followed by the next, leaving the original one in the thoughts. Think Bitcoin, or perhaps even the other recent narratives such as all things blockchain.
Underneath, the 14,600 level should be supported, but if we break down below there then we could go looking to the 13,750 level. The 13,750 level is an area that has been important in the past, and it’s probably worth noting that the 50-Week EMA sits right around the 13,000 level as well. Because of this, I do anticipate that we would see a lot of traders getting involved in that region. Anything below there would obviously be devastating for the NASDAQ 100, but I just don’t see that happening anytime soon. Quite frankly, the market desperately needs to pull back, so don’t be surprised at all to see a slightly negative month of July. However, if we clear that 15,250 level, then we will almost certainly see the market target the 16,000 level next. I expect a lot of volatility, but as things stand right now, you have to look at pullbacks as potential value.
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