NASDAQ 100 Forecast: Continues to Sell Off – 31 August 2022
This is a market that looks like it’s ready to continue the overall downturn, but keep in mind that even in the worst bear markets, there will be the occasional massive shift higher.
The NASDAQ 100 has fallen a bit during the trading session on Tuesday to break well below the 12,500 level. At this point, the market then fell to the 12,300 level. There is a little bit of support in this area, but quite frankly it’s very minor, to say the least. I think it’s probably only a matter of time before you break down below there and go looking to the 12,000 handle.
Stock markets are crashing again
Looking at this chart, we are well below the 50-Day EMA, and most certainly well below the 200-Day EMA. I think now, it’s obvious that we are on a trend to the downside, and therefore I think it does make quite a bit of sense that rallies will continue to be sold into. This is especially true as interest rates continue to climb, which is toxic to the idea of high-growth companies and startups. In other words, it works against technology companies in general.
Rallies at this point I think offer nice selling opportunities, and the 50 Day EMA above could be a nice area of selling pressure. If we break above there, then the 13,000 level comes into the picture as resistance as well.This is a market that looks like it’s ready to continue the overall downturn, but keep in mind that even in the worst bear markets, there will be the occasional massive shift higher. Bear market rallies tend to be some of the most vicious out there, so be aware that if the market starts moving against you in a short position, you need to get out and stop messing around.
I do think that given enough time we will retest the bottom, which is closer to the 11,000 level. That doesn’t mean we get there overnight, nor does it mean that we get there easily. However, as volume starts to reenter the market in September, nothing good is going to come of that as people are starting to freak out about not only interest rates, but the fact that we are more likely than not going to see quite a bit of economic contraction, perhaps even a recession. In this scenario, it’s difficult to imagine a scenario where I would get bullish unless of course, the jobs number was so bad that the Federal Reserve had to jump in and do something. I doubt that’s going to be the case anytime soon.
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