The Nasdaq 100 sees a bit of selling pressure on Wednesday, as it is now testing the critical support level near the 25,000 level.
Nasdaq 100
The Nasdaq 100 continues to see selling pressure on Wednesday as we are approaching the crucial 25,000 level. This is a market that has seen quite a bit of artificial intelligence driven trading, specifically selling pressure against those AI names, and I think this continues to be something worth watching.
Nonetheless, we are at the bottom of a range, and I do recognize the 25,000 level as a potentially important support level both structurally and psychologically. So, there is a very real world in which we see a bounce and continue to go higher.
The Impact of Earnings Season and Geopolitics
The problem with that of course is that markets right now are also going through the earnings season and therefore things could be a little bit messy at times. I wouldn't be overly concerned about it as long as you are not overleveraging your position. The earnings season probably won't do too much damage, but I would also point out that you need to be cognizant of the fact that there are a lot of geopolitical concerns out there right now that are making traders quite nauseous.
I like the idea of buying on the dip and I certainly would not short this market. But I think you've got a scenario where things are so shaky at the moment the real play is to say whatever it is you are doing; you need to do with a small position.
Getting overly aggressive at this point is a recipe for disaster as one bad earning call could really cause chaos as traders may extrapolate that to the overall market health itself. I do believe that we will go higher over time and I do believe that we break out to the upside. I just think we have some work to do before we can actually make that happen.
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