- The Nasdaq 100 rallied a bit during the Friday session, but still finds itself struggling with the idea of breaking above the 21,000 level.
- The 21,000 level, of course, is a large round psychologically significant figure that has caused a little bit of chaos for the market as a ceiling, but we did break above there previously, so I think given enough time, we probably try to do the same.
December is Different
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We are now into December and that is important because December is considered to be one of the more unique months of the year because there is something known as the Santa Claus Rally. The Santa Claus Rally is when money managers out there who have performed less than the benchmark that they're measured by will start buying things in order to hopefully make some gains. If we could break above the 21,200 level, then that Santa Claus Rally will become self-fulfilling probably pop a bit.
Short-term pullbacks in the meantime should end up being buying opportunities with the 20,500 level being support. And then underneath there, you have the 50 day EMA, which comes into the picture as well. I have no interest in shorting this market, so therefore anytime we do pullback, I'm looking for some type of bounce in order to get long again of the NASDAQ 100.
The highflyers will continue to be watched very closely. So watch all the usual suspects of the list of companies as it's really only the top five or seven that move everything anyway. It's difficult to short during the month of December, although there could be big profit taking moves to the downside, but those normally get bought into. So I still have an upward bias and I think it's probably only a matter of time before we break out.
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