- The NASDAQ 100 turned around quite nicely during the trading session on Monday, as at the open in Asia, overnight futures traders started to buy immediately.
- At this point, the market looks as if it is trying to wipe out the entirety of the losses from the Friday session, which tells you that the market still has plenty of buyers out there willing to get involved.
- The market had sold off quite drastically on Friday, but it now looks as if nobody really cares, almost like it was just a strange dream.
Technical Analysis
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The technical analysis for this market is obviously very bullish, but we may be getting ready to enter into some type of sideways action, which would make a certain amount of sense considering that we had been so bullish since the middle of April. By shooting straight up in the air like we had, sooner or later the market does need to reassess itself and perhaps try to digest some of the momentum. On a pullback, I think that buyers are willing to get involved, just as we have seen during the Monday session. The 22,500 level is an area that I anticipate being very supported, especially now that we have the 50 Day EMA racing toward that level.
On the other hand, if we were to rally and break above the 23,250 level, then it opens up a very real possibility of the NASDAQ 100 going to look to the all-time highs again, hit just last Thursday. While the last couple of days have been very brutal, the reality is that we are still light years away from seeing anything close to a bearish trend, so ultimately, I think you have to look at any dip in this market as a potentially viable buying opportunity in a market that has been bullish for several months. I don’t like the idea of shorting indices anyway, and with the fact that we have earnings over the next several days, I think that the NASDAQ 100 will continue to be volatile, but I do believe it will favor the upside.
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