The NASDAQ 100 has seen a sharp reversal during the early part of the session on Monday, as tweets come out that the US and Iran are talking – only to be denied by the Iranians.
NASDAQ 100
The NASDAQ 100 has seen a sharp reversal during the trading session on Monday after initially looking very poor overnight. The idea of course is that geopolitical de-escalation is a real possibility as it was reported by President Trump that the United States and Iran had very productive talks over the weekend.
Since then, we have had the Iranians deny that, so we will have to see how long this lasts, but I think this relief rally makes a certain amount of sense, mainly because we were testing pretty significant support in the form of 23,800.
Relief Rally and Market Uncertainty
By bouncing there, we have seen the market react to a couple of major companies rallying such as Nvidia and Tesla, but there is more or less the entire relief rally of pretty much everything. That being said, multiple times and multiple people from Iran have since said there has been no talk, so we will see.
My suspicion is this is a temporary scenario. We could go looking to the 25,000 level, but we would need some type of confirmation out of Iran to make that happen. If we were to break down below the 23,500 level, it opens up the possibility of a drop down to the 23,000 level.
We are moving on tweets, and we are at pretty significant support. I would love to buy this market, but we need some type of confirmation. Right now, we just don't have it, so I am cautiously optimistic, but the keyword there is cautious. There is no such thing as stability at the moment, so position sizing will be crucial for your long-term financial health.