- The Nasdaq 100 sold off in New York, but price action still resembles consolidation near major support levels.
- With the 25,000 area and the 50-day EMA providing a technical floor, holiday-thinned trading and rate-cut speculation shape near-term behavior.
Traders in New York have started selling the Nasdaq 100 again, but I think we're in a situation where this ends up being consolidated more than anything else. After all, the 25,000 level is an area that's a large, round, psychologically significant figure and will have a major influence on the psyche of traders in general. The 50-day EMA is sitting right here as well, so a lot is going on that I think continues to cause a little bit of a headache for traders. That being said, let's take a look at the week here. Thursday has the Thanksgiving holiday in the United States, and Friday is typically very quiet as most traders don't return to work. During the session on Tuesday, we got retail sales figures that were somewhat disappointing.
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But really, at the end of the day, that only has people thinking that maybe the Federal Reserve will cut rates and that should be good for Nasdaq overall. It's worth noting that we have gone back and forth over the last couple of weeks. And I think that means that we are in the process of trying to form some type of consolidation range that is typical after a big move, like we've seen over the last several months when the market gets a little bit erratic at the end and then goes sideways for a while to explain the idea of perhaps getting adjusted and getting comfortable with these levels.
Another thing that I would keep in mind is that we do typically get the Santa Claus rally in December, which is when money managers chase stocks in order to bring value to their shareholders or their investors, as they may have missed a big portion of the move higher. I think this year will be somewhat subdued, but it is still a thing that happens in December because most people have made money all year, so it will only be those who are truly desperate. However, there is another part of the Santa Claus rally when managers who don't own the correct stocks may have to buy into them just to show that they do, in fact, own Nvidia, Apple, or whatever it is that is missing from their portfolio.
So, I think short-term pullbacks continue to get bought into in the short term. It looks like 24,000 is offering support.
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