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The Nasdaq 100 has been negative during the month of July, especially towards the back half of the month as interest rates were a little bit higher, but quite frankly, the biggest problem that the Nasdaq is likely to face is going to be the fact that the artificial intelligence trade is starting to be questioned quite a bit, and if that does in fact end up being the game we're playing here, that will hit the Nasdaq 100 particularly hard.
The 28,500 level had been support until late in the month, and breaking through there does open up the possibility of a move back down to the 27,000 level.
Navigating the August Pullback
Regardless, I do think that any sharp pullback here is still more likely than not going to be a potential buying opportunity, as has been the behavior of the markets for some time. So, with this, I'm looking to buy the dip sometime during the month of August, but I think we have some noisy days in the early part of it.
If we break back above the 28,500 level, that would be a very bullish sign, and I think in and of itself could be an opportunity to get long. I don't have any interest in shorting the Nasdaq 100, and even if it does break down, I'll just step to the side; I'll buy it at cheaper levels.
Time has shown more than once that anytime the Nasdaq really starts to fall off, there are people out there willing to get involved given enough time. I think that will more likely than not continue to be the case; I don't see any reason for it not to be.
So, with this, I look at this as a market that eventually will find its way back to higher levels, but we may have some work to do in the meantime in order to make that happen. It won't necessarily be the easiest thing in the world, but I think you have to recognize the reality that passive investing has made the indices in the US somewhat buoyant over the longer term.
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