The Nasdaq 100 has made additional gains this morning and the futures market is near 29,660.00 with fast results flickering, but day traders need to remain careful about stepping into the index blindly.
Friday’s selling on the Nasdaq 100 was more than large. A fall of around 4.7% took place which cannot simply be brushed aside and claimed to be unimportant. The selloff didn’t occur because of geo-political talk, it happened because traders not only got nervous, but maybe also because of a vast amount of profit taking.
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Yesterday’s market closed up nearly 1.58% which brought the Nasdaq 100 back into the light and stopped thoughts of continued losses bleeding into the marketplace. This morning’s move upwards again via futures has the Nasdaq 100 around 29,660.00 with fast results being displayed on trading screens. The gains made this morning show some investors and speculators believe Friday’s selling was overdone and want to take advantage of the lows perhaps. But maybe the gains now being displayed need to be questioned a bit more.
Short and Near-Term Risk Horizon Still Dangerous
Tomorrow the U.S will issue its Consumer Price Index reports which will show what inflation has done recently, this in the wake of higher energy costs. However, the Nasdaq 100 has not been trading based on fear of higher fuel prices, it has been within a buying frenzy the past two months because folks have wanted into the upwards momentum, and practiced likely front running before the SpaceX IPO which occurs this coming Friday. And last Friday’s selling may have had a lot to do with profit-taking by some large players.
The above statement is nearly impossible to prove. Yet, it is clear that many analysts are worried about the potential effects that will take place in the Nasdaq 100 after the SpaceX IPO. Concerns about valuation abounds and some are warning that retail traders are going to get lured into the SpaceX IPO show and be hurt when big players start to cash out profits. The Nasdaq 100 has a few days of trading before the big IPO event – one that is going to create the world’s richest company per valuation. Yet the question, is SpaceX a good investment remains legitimate. And sentiment being generated around this question is causing nervousness.
Nasdaq 100 Speculation
Day traders who are convinced the Nasdaq 100 is oversold and do not care about SpaceX – but only the value of the index have a solid point. Yet, the next few days of trading on the Nasdaq 100 will be about sentiment generated surrounding the IPO event.
Yes, tomorrow’s inflation numbers could play a role on mid-term outlook, but it is likely the S&P 500 which will deal with those concerns more on Wednesday.
The Nasdaq 100 is a speculative game in a large manner and behavioral sentiment quite volatile.
This morning’s early gains may lure some folks into the Nasdaq 100 today, but when full volume comes via the cash market in a handful of hours, that is when we will see additional volatility as big money makes big bets.
Nasdaq 100 Short-Term Outlook:
Current Resistance: 29,655.00
Current Support: 29,595.00
High Target: 29,710.00
Low Target: 29,530.00
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