There are a lot of concerns about the banking system in the United States, and even though the headlines have calmed down, we have a long way to go before the interest rate situation becomes favorable.
- The NASDAQ 100 rallied just a bit during the trading session on Monday, reaching above the 14,600 level.
- The market has a lot of resistance above, therefore it’s likely that we will continue to see a lot of noisy behavior, and as a result, I think it’s probably likely that we continue to see buyers on dips.
Underneath, I think the 14,500 level probably offers a bit of support, followed by the 14,250 level. Ultimately, this is a situation where I think you continue to see a lot of noisy behavior, and therefore it’s likely that we continue to see plenty of buying opportunities given enough time. With this being the case, the market is likely to continue to see buyers coming in to pick up the Big 7 companies that tend to move this index in general. I think this will continue to be all about a handful of companies and certainly not anything to do with the economic outlook of the United States. That’s normal behavior over the last 14 years or so as the game has been about liquidity and not so much about economic conditions.
Underneath, I think the 13,750 level is a major support level, and I think if we stay above that area, it remains a situation where you simply cannot sell the market. However, if we were to break down below that level it could open a huge hole in the floor of the market, sending the NASDAQ 100 tumbling all the way down to the 10,500 level over the longer term. There are a lot of concerns about the banking system in the United States, and even though the headlines have calmed down, we have a long way to go before the interest rate situation becomes favorable. While the banks don’t directly affect the NASDAQ 100, the idea of a lack of liquidity will so keep an eye on that.
All, as we approach the 15,000 level, I think there are a lot of people that are going to continue to try to push this market up to that area, if for no other reason than the simple psychology of it. I have no interest in shorting this market anytime soon, but there will come a day when it’s time to start selling, and when that happens, I will go big.
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