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Nasdaq Forecast: Bounces From Support

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
  • The NASDAQ 100 bounced quite a bit during the early hours on Monday as the 18,335 level has offered support.
  • The area had previously been resistant, but it's also worth noting that the 200 day EMA sits just below that level.
  • So, I think there are a lot of things going on here that could offer support for the NASDAQ 100.

From a fundamental side, a lot of people are concerned about whether or not the global economy is going to continue going ahead and positive, or if it is going to sputter. You should also keep in mind that this week has a severe lack of major announcements, at least in comparison to many other weeks, so it's possible that the Nasdaq 100 might try to capitalize on this.

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After all, traders already know that the Federal Reserve is going to cut rates later this month in about two weeks, the question of course is what do they do after that? It's very likely that they will try to inflate things away again, perhaps even now with a little bit of quantitative easing to go with those rape cuts. However, there are a lot of concerns in the global economy and therefore we could see a bit of a sell-off between now and then. If we were to break down below the 200-day EMA that could lead to a much deeper correction.

Nasdaq Forecast Today 10/09: Bounces From Support (graph)

On a move to the upside

On the other hand, if we could break above the 19,000 level, that would be extraordinarily strong. In the short term, I think we probably have some consolidation with a slight and little bit of an upward bias despite the fact that Friday was so negative. Because of this, I believe that we will continue to see a lot of volatility, as the uncertainty is going to be a major factor going forward. With this being the case, I think you have a situation where it is literally day to day in this index.

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Christopher Lewis
About Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
 

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