NASDAQ 100 Forecast: December 2023

• The NASDAQ 100 has been explosive to the upside during the trading month of November, as interest rates have fallen quite drastically in the bond market.
• With that being the case, the market is starting to pay close attention to the 16,000 level, as it is a bit of a barrier.
• We will more likely than not see a bit of a pullback from this point, perhaps opening up the possibility of the 15,250 level offering support.

Near the 15,250 level we have a significant amount of support based on previous action, and of course the 50-Week EMA, followed very closely by the 200-Week EMA indicator. We’ve been in an uptrend for some time, but a bit of a pullback does make a certain amount of sense considering that we had exploded so rapidly to this level. Ultimately, a short-term pullback will end up being a nice buying opportunity, but we also have to keep in mind that the month of December features holidays that will sap liquidity out of the market as well.

Lack of Volume Warrants Cautiousness

The alternate scenario of course is that we just simply take off from here and explode above the 16,100 level, which could be a bullish move just waiting to happen, but at this point I think it does make quite a bit of sense that we need to be cautious with our trading positions, and if you are already involved in a bullish position for the NASDAQ 100, it might be time to push your stop loss is higher, as I do think that this pullback is somewhat imminent. Furthermore, I think it’s very healthy for the market. Keep in mind that the NASDAQ 100 is only driven by a handful of stocks for the most part, so you will have to pay attention to all the usual suspects.

Lack of volume continues to be a major concern in the 3^rd and 4^th week of the month, so you need to be very cautious later in the month. That being said, markets tend to go higher over the longer term anyway, due to the fact that the NASDAQ 100 is not an equal weighted index, and therefore the usual suspects will continue to cause passive investors to jump into this index and rally. I don’t have any interest in shorting this market anytime soon, but I do recognize that buying it all the way up at these levels might be a bit of a stretch.