- It’s hardly a surprise to see this market continue to fall.
After all, the Bureau of Labor Statistics released the jobs report, and it was a huge mess, with the United States adding 114,000 jobs for the month of July, instead of the 175,000 expected. This had people running for cover yet again, and therefore it does make a certain amount of sense that the NASDAQ 100 fell, because that’s where a lot of people start throwing “hot money into the market.”
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Institutional Trade Unwinding
This is a massive institutional trade unwinding, as hedge funds around the world had borrowed massive amounts of money in the Japanese yen and bought technology stocks with it. At this point, both of these markets need to react to the fact that there is a lot of panic, and I think that the NASDAQ 100 will more likely than not end up being a situation where there will be some value hunting out there, but there’s no need to try to be a hero here and jump into the market right away.
Because of this, I think you probably see a little bit of follow through in this move, but the question now will be whether or not the 200-Day EMA underneath gets broken through. The 17,900 level is an area that the market is likely to continue to see a little bit of interest in that area, so if we were to plunge through there, then the market will probably fall apart. Keep in mind that the NASDAQ 100 is driven by just a handful of stocks, and with Nvidia getting far too ahead of itself and now correcting, it makes a lot of sense that the index itself would drop.
If the market could break back above the 19,000 level, then you can search make an argument that it’s worth chasing the momentum to the upside again. At this point, it doesn’t look like we are going to do that, so therefore I think you’ve got a situation where you will continue to see massive amounts of volatility to say the least.
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