Potential signal:
- If the market can close well above the 30,250 level, I am buying it at the close, with a stop at 30,000 and a target of 32,100.
- The NASDAQ 100 continues to be sensitive to outside influences, as rising interest rates have been pressuring the index all day.
NASDAQ 100
The NASDAQ 100 is falling pretty hard during the trading session on Wednesday as CPI numbers have come out hotter than anticipated. Because of this, it looks like the market is going to test that crucial area that it had been testing a couple of weeks ago, just above the 50-day EMA again.
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If we can turn around and break above the 30,250 level, then it could open up a move to higher levels. This is a market that is dealing with higher interest rates and, of course, financing costs. Valuations are starting to become a bit of a problem. The question now is whether or not there can be any real resiliency here.
The structural pattern of the NASDAQ 100 has been strong for some time
If the market can turn around and take out the 30,250 level by the end of the session, it could be a strong sign of things to come because, quite frankly, we have even more reasons to think that the stock market should be suffering.
With this being the case, the markets are likely to continue to see value hunters because there is still the artificial intelligence trade. However, higher yields putting pressure on valuations certainly will help the idea for bears to start to raise quite a bit of noise in the market.
Even if we sell off, though, the structural pattern of the NASDAQ 100 has been strong for some time, and I'm not looking to fight it. This is an ugly candle for sure, but this isn't the only ugly candle that we've seen over the last several months.
Ultimately, it looks as if there will end up being buyers underneath, but we have to pay close attention to the yields because if they get out of hand, then that could cause some problems in America. As things stand right now, they are rising, but not exponentially so.
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