- It's been quite interesting to see that this market has shot straight up in the air, which makes a lot of sense considering that yesterday's reaction to the CPI numbers were completely overdone after all.
- CPI coming in at half of what it was, had people looking to rotate stocks into the Russell 2000 and other small cap indices.
With that being the case, it provided an opportunity for those looking to get involved in the same handful of stocks that everybody else owns. And here we are. With that being the case, we have recaptured quite a bit of the losses from Thursday, and it looks like the uptrend is going to continue to see plenty of buyers reaching to the upside.
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And I think eventually breaking out to a fresh new high short term pullback should continue to be supported near the 20,000 level and then again at the 19,500 level, where the 50 day EMA currently resides. Yes, the candlestick on Thursday was rather horrific and it was rather scary there for a minute. But anybody who did decide to short the market based on that candlestick, at least at this point in time, is losing money.
Short Squeeze? Maybe.
And that could provide a little bit of a short squeeze going forward. Quite frankly, the one thing that's probably keeping this market from breaking out to a fresh new high almost immediately is the fact that it is Friday, and a lot of traders will probably already have head home for the weekend, as we are in the afternoon when I record this.
All things being equal though, this is a market that continues to be more or less buy on the day and therefore I don't have any interest in shorting it. I do think ultimately the Nasdaq 100 will continue to go higher and break to a fresh new high, as the momentum continues to see a lot of chasing.
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