Expect volatility, but I think Monday is going to be a very important session as it gives us a heads up as to where traders truly stand.
- The NASDAQ 100 rallied a bit Friday as it looks like we are threatening a major resistance barrier.
- The 13,000 level is worth paying close attention to, as it has been important more than once.
- As we have seen such a big move over the last week or so, it does suggest that perhaps we are getting close to a barrier that could cause some issues.
Monday to Bring Questions
That being said, the market is likely to have a lot of questions on Monday, especially as we are parking this market right at the major the 13,000 level being broken to the upside opens up the possibility of a move to the 13,500 level, which is an area that has also been resistance. Ultimately, the market is likely to see Monday is a completely different situation, because you should keep in mind that Friday was the end of the month. In other words, PMs were out there marking up at the end of the month. Yes, it’s technically illegal, but it happens almost every month.
If we do break down from here, the 12,250 level could be an area of support. The 50-day EMA sits just below there and is rising, so that does make a certain amount of sense that the area could be rather difficult to break through. If we did break through it, which is substantively breaking through the 12,000 level, then we could go much lower. At that point, it opens up another 500 point drop rather quickly, maybe even 1000 points.
Keep an eye on interest rates in the United States, because they will have a lot to do with what happens here. Remember, technology stocks are extraordinarily sensitive to interest rates, and it is worth noting that the markets are currently going through earnings season, with a lot of the technology companies reporting presently.
Expect volatility, but I think Monday is going to be a very important session as it gives us a heads up as to where traders truly stand. Ultimately, be aware of the market if it closes above 13,000, or if it decides to turn around and show signs of weakness. Position sizing will be crucial, but if we can take of or break down, then you can start to add to a winning position.
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