- The Nasdaq 100 has risen slightly during the early hours on Wednesday as we continue to see more of a buy on the dips market going forward.
- This does make a lot of sense considering that the Federal Reserve is likely to cut interest rates at least twice this year, if not three times.
In that environment, typically technology stocks fare really well. And that of course is the bulk of what we're looking at here. Furthermore, we also have a situation where traders will continue to buy the same handful of stocks and that does have a major influence on where we are at. The 17,775 level is a major floor in this market, especially now that we have the 50 day EMA sitting right there as well.
Buying Dips Continues to Be the Way Forward
With that being the case, I like the idea of buying dips going forward. And that of course has been the favored strategy of most market participants for months. Now, this is a market that runs solely on momentum half the time. So, keep that in mind as well. You simply don't want to get in front of this train by trying to short the market.
Even if we broke down below the 50 day EMA, I don't know that that would change my overall strategy, just that I would probably switch to a weekly chart. The 18,500 level above should end up being significant in its importance and it could be a target. Breaking above that opens up the possibility of a much bigger move, perhaps even to the 19,000 level. Either way,
I remain bullish of the NASDAQ 100 until I'm given a reason not to be. At this point, there just isn't much of a reason to think about shorting, especially given the fact that the indices aren’t even designed to fall for any great length of time – as they are not equal weighted. Remember, passive investors continue to buy all of the same stocks, which of course are the biggest ones in this index. It’s a feedback loop at this point in time.
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