All things being equal, NASDAQ is very strong, but it is also very stretched.
NASDAQ 100
The Nasdaq 100 has rallied quite nicely during the trading session on Tuesday as we continue to see upward pressure. All things being equal, this is a market that is overstretched. That being said, we are getting headlines that the United States and the Iranians are going to perhaps meet again in Pakistan. So, that’s obviously a bullish headline, but at the same time you have to worry about something negative coming out and just wiping out the momentum.
I would be very cautious about trying to chase the market here. This could be a situation where traders look at this through the prism of possibly getting a fake out. All it would really take is the Iranians to come out and say that they weren’t going to do it, and that would be the end of it. Unfortunately, that has been the game we’ve been playing for a while, so I believe you just have to live with this.
Chasing the Market at Highs
I would like to see some type of pullback. Somewhere near the 25,000 level would be very interesting and very attractive as long as we bounce. I’m looking for a pullback in a bounce so that I can get in on the right-hand side of the V. Can we get to the 26,250 level? Of course.
The problem that I have is that you are most certainly chasing all the way up here. So, unless it’s some type of short-term type of position that you are trying to set up, it just doesn't make any sense that you get aggressive here. Day trading might be possible, but I think if you’re looking for some type of bigger move, you’re really just hoping for good headlines. Be cautious and keep your position size reasonable.