- As you can see, the NASDAQ 100 has shown itself to be somewhat dead money over the last couple of days as we are trying to sort out what to do next.
- Ultimately, this is a market that I think is bullish overall, but there isn't much in the way of economic announcements to move the markets between now and Friday.
When the Federal Reserve's favorite inflation gauge, the Core PCE numbers come out. Between now and then, I don't expect much, and at this point, I would just bring to attention the idea that the market has sat still. That's actually a bullish sign, considering that it's been given an opportunity to pull back, but we just didn't do it. Even if we did pull back, there's plenty of support underneath, all the way down to the 17,775 level, where not only have we seen previous support, but we also have the 50 day EMA. Keep in mind that the world is waiting for the Federal Reserve to start cutting rates again, and therefore everybody's excited about owning stocks. Granted, it is a very overdone market, but at this point, I just don't see an argument for trying to shorten this market quite yet.
How to Trade It…
Buying dips continues to be the prudent way to approach this market because it offers value in what is obviously a very bullish run. If we break above the highs of last week, then the NASDAQ 100 could go looking through the 18,500 level, followed by the 19,000 level, which I think is very possible. That being said, as long as the fundamental narrative stays the same, I just don't see an argument for shorting.
While the economy may or may not be strong, its all about momentum on Wall Street, and you must remember that a lot of the noise on the Street is New York centric, which isn’t reality. However, price is reality – and that’s what matters. The markets will continue to cheer bad economic news, based on the idea of liquidity being added by the Fed.
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