The NASDAQ 100 is up over 41% this year, and this has people excited. At this point, the “rubber meets the road”, and we need to see earnings come in well enough to propel the markets higher. This is where the late Tuesday session comes into play, as we will have earnings calls from Alphabet, Microsoft, and Meta. In other words, the Wednesday session could be noisy. But wait, there’s more!
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The Federal Reserve has its interest rate decision, statement, and press conference on Wednesday as well. In other words, volatility is going to be at extremes this next 24 hours, and after that we have the ECB and the Bank of Japan releasing interest rate decisions as well, so volatility is to be expected. That being said, the NASDAQ 100 has been one of the better performers, so at this point I think it becomes more or less a “binary situation.”
If those big 3 companies can report decent earnings, it’s more likely than not that the NASDAQ 100 will continue to go higher, regardless of what the Federal Reserve does. There might be an initial knee-jerk reaction to the downside after the Federal Reserve statement, but the traders on Wall Street have chosen to completely ignore the Federal Reserve this year, and it looks as if they will probably continue to do more of the same. It’s worth noting that the 50-Day EMA sits underneath, perhaps offering a bit of a support level. After that, the 15,250 level is an area that we have seen a lot of action at previously, so I would anticipate that also offers a certain amount of support as well. If we were to break down below there, it could change a few things, but even then I don’t necessarily think I would get bearish anytime soon.
The next support level is closer to the 14,600 level, but if we were to give that up, then I think you have a significant pullback that has legs. On the other hand, if the big 3 stocks mentioned earlier have good earnings calls, I really don’t see much that will keep the NASDAQ 100 from going to the 16,000 level.
Potential signal: On a move above the 15,550 level, and after earnings, I am buying this contract, with an eye on the 16,000 level, and a stop loss at the 15,235 level.
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