The NASDAQ 100 has gone back and forth during the bulk of the trading session on Thursday, which should not be a huge surprise considering that it was the end of the month’s rebalancing. Nothing has changed from a fundamental standpoint, so a lot of what we had seen during the trading session should be thought of as noise. That being said, the market could very well get a little bit of a bounce heading into the weekend, but I would anticipate that the 12,000 level is probably a bit too much to overcome.
When I look at this chart, I recognize that the 50 Day EMA above will continue to cause issues, and now that it is approaching the 12,000 level, I think that the previous selling and the indicator may come into the picture to cause even more downward pressure. If we were to break above there, then the NASDAQ 100 could very well go looking to reach the 13,000 level, where I see even more structural resistance.
On the other hand, if we were to break down below the 11,000 level, that could open up the trap door to send the NASDAQ 100 down to the 10,000 level given enough time. I do think that this is a market that will continue to get hammered from time to time due to interest rate fluctuations, but right now I just don’t see any reason to chase this market to the upside. This still remains a “fade the rallies” type of market, just as the rest of the indices do. Unless the Federal Reserve changes its tune completely, it’s difficult to envision this market truly picking up its feet and kicking off a new uptrend.
At this point, I think we continue to see a lot of fear and concern out there, and of course, as per usual, you will have to pay attention to the “generals” when it comes to the NASDAQ 100. That’s Tesla, Facebook (Meta), Apple, Amazon, and so on. Unless those markets suddenly start to perk up, it’s almost impossible for the NASDAQ 100 to show any real strength. Ultimately, this is a market that is going to follow right along with interest rates, and a handful of stocks. Fading rallies until we break above the 200 Day EMA is probably the soundest of strategies that I know right now.