The Nasdaq 100 has been negative again during the trading session on Wednesday, but we are starting to see the market at least attempt to push back a bit.
The 28,500 level is an area that's been supported for some time.
Despite the fact that on Tuesday we broke down below it, you'll notice that we closed well above it.
I think this is where the real fight is playing out.
The 50-day EMA held as support during the Tuesday session, and it is rising towards the $28,500 level, so I'll be very interested in watching this. This is a market that's recently seen a couple of brutal days, but when you look at the longer-term trend, basically since the end of March, you only had a handful of red candlesticks on the daily chart, so we needed this, quite frankly.
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There are concerns about the artificial intelligence trade and whether or not the math works out. And someday it probably will fall apart. We might get a situation like technology stocks in 2001. That would be great. That will allow us to buy companies like NVIDIA much cheaper. But we'll just have to wait and see how that plays out.
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We do have a massive IPO in the form of SpaceX on Friday. Maybe that's part of what's causing people to move money around. Or it could just be the fact that interest rates are higher than they typically are. Right now, with the 10-year yield being over four and a half percent, that puts a little bit of pressure on some of the riskier assets out there, which of course, in the NASDAQ 100, aren't hard to find.
Ultimately, I do think this ends up being a buying opportunity, but we must stay above the 50-day EMA. If we break down below there, then the bottom's going to fall out, and we will get a much deeper correction.
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