More confusion is ahead but it certainly looks as if we have a major resistance barrier just above that should be paid close attention to.
- The NASDAQ 100 index rallied a bit during the session again on Tuesday, but just as we had seen on Monday, the 13,000 level seems a bit too much for the market to overcome.
- Because of this, I think it’s probably only a matter of time before we get a bit of a pullback.
- However, if we were to go on the opposite direction it would certainly make a huge statement.
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Two shooting stars in a row is generally a very negative sign, but if we were to break above the heights of the last couple of days, that would almost certainly be an explosive move to the upside just waiting to happen. At that point, I would anticipate that the NASDAQ 100 will go looking to reach the 13,500 level, an area that has seen a lot of noise in the past. That being said, anything above there would be a massive trend change. We have certainly seen a nice rally over the last couple of weeks, but we have suddenly hit a huge brick wall.
NFP Announcement Will Determine Direction
It’s worth noting that Friday is the Non-Farm Payroll announcement, and that will have a major influence on where we go next. After all, traders starting to focus on the possibility that the Federal Reserve is about to pivot, meaning that they will have an easing monetary policy. That is the case, despite the fact that the Federal Reserve has had a couple of members come out and explicitly say that the market has it wrong. Regardless, the market will do whatever the market does, so pay close attention to the area that we seemingly cannot break above. If we do, it may act as a “beach ball held under water”, meaning that it could shoot straight up in the air.
More likely than not, we can get a bit of a pullback, and perhaps try to get down to the 12,500 level. Friday will have a huge impact on the markets, because if it looks like the Federal Reserve will have to do whatever it can to tame inflation because of job growth, which in and of itself could be a bad thing as well. In other words, more confusion is ahead but it certainly looks as if we have a major resistance barrier just above that should be paid close attention to.
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