Sooner or later, you have to digest gains, and the end of the year, of course, made perfect sense.
NASDAQ 100
The NASDAQ 100 was very noisy and choppy during December, which makes a certain amount of sense considering that liquidity would be drying up toward the back half of the month. Furthermore, we have been consolidating for a couple of months now, which again, I think makes quite a bit of sense considering that the market shot straight up in the air after we bottomed in April. Sooner or later, you have to digest gains, and the end of the year, of course, made perfect sense.
So now the question is, where do we think we are going in January? I suspect that we go higher, and I do think that eventually we break above the 26,000 level. But I also recognize that it may not be an easy move. I think you will continue to see a lot of questions asked about the trend, but ultimately, the longer-term trend is very firmly ensconced in the market. And your job as a trader will be to ignore a lot of the day-to-day nonsense that you hear online or perhaps even the little bit of volatility here and there.
The AI Bubble
The big headline, of course, is always going to be the artificial intelligence bubble that may or may not be busting, but quite frankly, I don't see any real strength to that scenario. With this being the case, and of course the fact that the NASDAQ 100 is a favorite of passive investing anyway, I think it's only a matter of time before any pullback gets bought into. I like the idea of buying the right-hand side of a V pattern bounce, and that's exactly how I'm going to play this.
I do believe that January will end up being somewhat positive, but if we were to break down below the 24,000 level, then we might have a little bit more of a deeper correction. I don't see that happening, but it is my red line.
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