- Given that Monday was President's Day in the US, it is not surprising that the Nasdaq 100 has been extremely silent during the trading day.
- To be honest, the stock markets are closed today, so what you're seeing is a CFD market, where Asians and Europeans are actively participating.
Tuesday, We Get Back to Work
Naturally, the underlying index will reopen on Tuesday, and many will be closely monitoring what transpires following the significant sell off on Friday. But this isn't the start of a serious breakdown. This could be just the start of a really great opportunity. Support is provided by the 20-day EMA underneath, and the 50-day EMA - which is obviously a big round number - hangs around the 17,000 level after that.
We have been experiencing an upsurge for a while, and I don't believe that it will finish very soon. Furthermore, even a modest retracement to the 17,000 level would only indicate a longer-term rally. Recall that while there was the Magnificent 7, it is now essentially the Magnificent 6 due to Tesla's financial losses, which are the main drivers of this market. Therefore, it makes natural that these large corporations be the focus of everyone's attention if that is the case and you engage in a lot of passive investing. So, it functions essentially as an ETF comprising the top six or seven businesses.
Having said that, I do believe we will eventually retake the 18,000 level and go for the 20,000 level. We might see a somewhat deeper decline if we manage to breach below the 16,950 mark, but I would never short the NASDAQ 100 at this point. To be completely honest, I would never willingly take that chance. After all, it seems as if we have finally gotten to the point where we completely ignore the economy and any concerns of inflation, and pay attention solely to the Federal Reserve and what it might do. Traders have been conditioned to behave like this since the Great Financial Crisis, and therefore it’s hard to imagine the market behaving any differently.
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