- The Nasdaq 100 dropped a bit early on Thursday as we continue to see a bit of profit taking overall.
- The new year has started on the back foot, but quite frankly I don't know that it means a whole lot other than the fact that the market has been so far overbought that this was necessary.
As we are heading into the jobs number, it does make a certain amount of sense that we would see little profit taking because why would you take any extra risk when such a volatile and unseen number could be coming out? There seems to be a significant debate as to whether or not the Federal Reserve is going to cut rates soon enough to satiate Wall Street or if they are going to wait for data. The dots on the Dot plot was moved around at the last meeting and that of course has caused some noise, but the FOMC meeting minutes were released during the Wednesday session, and they suggested that the Federal Reserve might be higher for longer when it comes to interest rates. That of course is bad for technology stocks, which of course is basically what the NASDAQ 100 is.
Remember it’s all the usual suspects again
Furthermore, it's driven by just a handful of stocks and with the underperformance of Apple, as of late, it does make sense that we would see a little bit of negativity. The top seven stocks continue to determine where we go and with that being the case, you have to watch all of the usual suspects. All of this being said, I would be very interested in the NASDAQ 100 closer to the 16,000 level, which is also just below the 50-day EMA, so it all ties together quite nicely. With that being said, a little bit of patience probably goes a long way.
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As we are at the beginning of the year, I suspect you have a situation where you need to be patient and wait for enough value to get involved in the markets. It’s not just the NASDAQ 100 but multiple major markets that I follow around the world, that are all giving me the same signal such as the Dow Jones 30, DAX, and many others.
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