- The Nasdaq 100 rallied quite significantly during the trading session here on Monday as we are now breaking out of the channel, entering a somewhat impulsive phase.
- That, of course, is a good sign that we are going much higher, and it's not a huge surprise considering that overnight and on early Sunday, there had been various reports that the Americans and the Chinese are coming close to some type of an agreement.
- This is very good for most tech stocks, as the situation between China and the United States has a major influence on the bottom line of most of these companies.
The Nasdaq 100 is driven by a handful of them. And that makes a certain amount of sense that we will continue to pay attention to the so-called magnificent seven, all of whom are doing fairly well during the Monday session.
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Breaking the Top of a Channel Means Something
Now that we are breaking out of the channel, that leads to an impulsive move, which typically will lead to a rather rapid explosion to the upside. Whether or not this is sustainable, it probably comes down to earnings calls coming out over the next week or so of some of the bigger companies, as well as whether or not the situation between the United States and China remains amicable.
So far, it looks like the market is taking all this as good news, and it's ready to go towards the 26,000 level. There might be a little bit of psychological resistance there, but I don't think it ends up being a big deal. Short-term pullbacks for my money end up being buying opportunities in what is an obviously bullish market, as they would offer a bit of value.
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