- The NASDAQ 100 initially fell during the overnight trading but turned around to show signs of resiliency during the trading session on Monday.
- The market is likely to continue to see a lot of downward pressure in general, as we have a lot of concerns out there that will continue to make the trading environment very difficult.
- I think it’s probably only a matter of time before we see the sellers come back into the market. Ultimately, the market is looking at the 14,600 level as an area of importance, so I think it makes a certain amount of sense that we bounce from here.
- However, we are during earnings season, and there will be plenty of concerns when it comes to the earnings season, and of course, what’s going on with the global economy.
It’s particularly interesting now that we have the major technology companies coming around the corner for earnings, so I would anticipate a lot of volatility. If we break down below the lows of the trading session on Monday, then it could go down to the 200-Day EMA. It’s the bottom of the overall downtrend channel that we have seen for some time, and I think that continues to be an area of importance.
Noise Ahead
On the other hand, if we turn around and take out the top of the candlestick for the trading session, then I think we have a situation where the NASDAQ 100 could go investigate the 50-Day EMA, near the 15,000 level which of course in and of itself will have a certain amount of psychology attached to it.
Because of this, I think this is a scenario where you have a lot of noisy behavior just waiting to happen, and therefore I think you’ve got a situation where we will continue to be very volatile, so you need to be very cautious about your position sizing and recognize that the market will continue to be very noisy and difficult, so be cautious, but recognize we are in the midst of a storm right now, and if we do rally from here, the 50-Day EMA will bring in a lot of noise and could even be a bit of a strong barrier. After that, we have the top of the overall downtrend channel near the 15,250 level.
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