Index Breaks Down to 50-Day EMA

This is a market that I think is more negative than positive, but over the next 24 hours it’s likely that we do very little until that statement.

• The NASDAQ 100 broke down a bit Tuesday to reach the 50-day EMA.
• The 50-day EMA sits just a bit above the 12,000 level, and I think there’s a lot of interest in that area.
• Even if we break down below there, I think we could see buyers come back into this market closer to the 11,500 level.

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Impact of Interest Rates

Breaking down below the 11,500 level is more likely than not going to be the gateway to much lower pricing, with a stop at the 11,000 level. It’s clear that technology stocks are suffering, and that does make quite a bit of sense considering that we have seen so much negativity out there, and technology stocks do tend to be highly sensitive to interest rates. Ultimately, the interest rates out there continue to work against the value of this index, and of course, they have been rallying quite drastically.

I believe that this market will eventually be front and center when it comes to any type of negativity or even recovery, but I think given enough time we do go lower. If we do get some type of volatility, that works against the NASDAQ 100 as well.

Pay close attention to the statement coming out of the United States central bank at the end of the day on Wednesday, because the more hawkish it is, the more likely we will see the NASDAQ 100 get absolutely pummeled. I do believe that eventually, this is a market that will go lower, but if we were to rally, I believe that a true trend-defining moment might be if we were to break above the 13,000 level. Breaking above that level would be very bullish, but I just don’t see how that happens.

Between now and the end of the session on Wednesday, it’s likely that we could see very little in the way of momentum. This is a market that I think is more negative than positive, but over the next 24 hours it’s likely that we do very little until that statement.

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