The NASDAQ 100 has pulled back just a bit during the trading session on Tuesday, but the buyers have returned yet again as retail sales cooled. This helps the idea of inflation coming down, and that should continue to push major technology stocks higher, as they do tend to love low interest rates. If we continue to see interest rate struggle a bit, it certainly makes sense that traders will continue to look at this as a positive index to invest in, especially as some of the darlings of Wall Street like Tesla, Microsoft, and others will all attract inflows with the idea of “cheap money” flowing into the system.
At this point, if we pull back from here, then the market will be looking at the 50-Day EMA near the 15,250 level, which is an area that previously had been significant resistance. The market breaking down below there would of course be a very negative turn of events, but I think that your “for the market” currently. Taking off to the upside allows his market to go look into the 16,000 level, and the 16,000 level is an area that I think a lot of people will be paying close attention to. In fact, it looks like there’s not much out there to stop this market from going to the all-time highs. This is despite the fact that we have seen a lot of negativity in the overall economy.
Most pundits believe that this market is going higher, and I do think that’s the case. However, from a longer-term macroeconomic standpoint, you have to be cognizant of the fact that the economy is cooling down, and eventually that causes some issues. However, as the NASDAQ 100 is basically driven by a handful of major players that are the “darlings of Wall Street”, it does make sense that this index will continue to outperform, and unlike in years past, Apple, Tesla, and Microsoft are thought of as safety plays as they have so much free flow cash.
Potential signal: at this point in time, it’s time to start buying again. The 16,000 level will be targeted, and a stoploss near the 15,500 level makes sense. Alternatively, if we turn around and break down below the 15,500 level, then I would be a buyer again, with a stoploss sitting just below the 15,250 level, and a target of 16,000 just like the first scenario.
