Pay close attention to the US dollar, because it should have a relatively high negative correlation.
- The NASDAQ 100 tried to recover toward the end of the month in July, as we are very volatile, to say the least.
- This is a market that will be paying close attention to interest rate variables, which of course would be inflation in general.
- When you look at this chart, it’s easy to see that the 12,000 level was important, and therefore traders may pay close attention to that for “market memory.”
The 12,000 Level
Furthermore, you should pay close attention to the 12,000 level as a potential “fair value point” as it is the middle of the overall consolidation that we have been in recently. Because of this, if we can break above the 13,000 level, then it’s likely that we could go looking as high as 14,000. The 14,000 also features the 50-week EMA. On the other hand, if the markets were to break down through the 200 Week EMA, that would be an extraordinarily negative sign.
I think at this point, the market is trying to figure out whether or not the Federal Reserve is going to lift it or not, which unfortunately may be quite data-dependent. In other words, we are just as confused as we were previously. Nonetheless, the market is looking very likely to turn things around and perhaps try to give a short-term relief rally. That being said whether or not we have the staying power is a completely different question altogether.
Pay close attention to the US dollar, because it should have a relatively high negative correlation, and therefore are paying close attention to anything that happens as far as the currency markets are concerned. The 200 Week EMA underneath is a major influence on this market, so if we were to break down below it, look out below. At that point, I would anticipate that we would probably threaten the 10,000 level. 10,000 obviously will have a major psychological impact on the market, so giving that up would be rather nasty. In that scenario, we could drop rather significantly. On the other hand, if we were to break above the 14,000 level, that would be a very positive turn of events for the NASDAQ, which of course is going to be very sensitive to dangerous rates as so many of the major players are “big tech.”
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