Sometimes it is about what a market won't do more than anything else. The fact that we haven’t fallen apart is somewhat surprising.
Nasdaq 100
The Nasdaq 100 fell significantly during the trading session here on Friday as the market has lost another 1%. That being said, we are sitting right around the 200-day EMA, and the 200-day EMA of course is important from a technical analysis standpoint, but when you look at the chart from the last 6 months or so, it is obvious that the 23,800 level offers a bit of a floor.
Interest Rates and Resilience
If we were to turn around and break up to the upside, we could see this market trying to get back to the 25,000 level. Ultimately, the VIX, although it measures S&P 500, suggests 1% moves in one direction or the other and I think that remains the case here. Ultimately, there are a lot of concerns about higher interest rates in the United States and that of course has a negative effect on riskier assets, think technology.
All of that being said, we also have external pressures in the form of war and geopolitics. Yet the Nasdaq 100 stays in the same range and therefore it suggests that there is an underlying resilience in the markets, and I think that is something worth paying attention to. I do find myself very optimistic about the Nasdaq 100 eventually, I just think that we need to get through a couple of things first. Remember, sometimes it is about what a market won't do. And despite the fact that we have dropped a couple of thousand points over the course of 2 months, it is fairly orderly and that is a bit surprising. If you had told me all of the things going on now 3 months ago, I would have thought the Nasdaq would have absolutely gotten crushed, but at this point, it is still just trading in a range. It is a big range, but it is a range nonetheless and that is a positive sign.