- The Nasdaq 100 rebounded sharply on Friday after Thursday’s steep sell-off, but rising volume and nearby technical levels suggest uncertainty remains.
- Traders are watching the 50-day EMA closely as the next decisive marker for direction.
The Nasdaq 100 initially fell during the early hours on Friday, only to turn around and show signs of strength. At this point in time, this market is very likely to continue to see a lot of noise. The recovery during the Friday session was very strong and very good news after the massive sell-off on Thursday, but we still have some work to do. The question at this point is whether or not this mattered in one direction or the other, but I also recognize you have to keep in mind that the volume has picked up over the last couple of days. And that is something that needs to be kept in the back of your mind, as it is a major factor in what happens next.
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Key EMA Thresholds
With this being the case, the Nasdaq 100 needs to pay close attention to the 50-day EMA, which is currently at the 24,831 level. If we can break above there, then the 25,000 level could be targeted. Anything above that level, then things get interesting to the upside. I have no interest in shorting this market. The Nasdaq 100 isn't built to be shorted, and it is not an equal-weighted index. The markets continue to see a lot of volatility, and if we were to turn around and start selling off next week, then the 23,250 level could be targeted.
Ultimately, I think a lot of this might have been short covering heading into the weekend. While people do not want to throw a ton of money into an uncertain market heading into the weekend, going into the weekend short is even more dangerous. So, I don't know how much I read into the move. We'll just have to wait and see. But that 50-day EMA above is what I'm watching closer than anything else.
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