The Nasdaq has seen a lot of buying early on Monday, as the interest rate markets settled down a bit, when the Americans look less than likely to get involved in the latest combat in the Middle East.
The Nasdaq 100 has rallied pretty significantly early on Monday as traders are reacting to the fact that the United States is not choosing to escalate the situation in the Middle East. And of course, interest rates did drop a bit.
Ultimately though, the Nasdaq 100 still has to deal with the massive sell-off that we saw on Friday, which was complete wipeout. I do think though, if we can close somewhere around the 29,500 level, that just proves that the sell-off was a short-term event.
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And truthfully speaking, I think that is probably the case. Yes, we are starting to hear the usual doomsday scenarios, but really at this point in time, every time we hear that, it gets stuffed. We could get a pullback and quite frankly that would just end up being a buying opportunity.
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The 50-day EMA near the 28,200 level is rapidly approaching that support level at 28,500, so watch that area. I think it is very important, and that is assuming that we even drop down there. The rebound has been rather impressive, but we still have some things to work through. I think breaking above 30,000 would be a huge victory. At that point, you would almost have to think that a fresh new high is all but assured, I guess, with the momentum that would be in the market.
When you look at this market from the end of March, even though we had that huge candlestick on Friday that was so negative, it still is but a blip on the radar and what has been a train just grinding to the upside.
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