NASDAQ 100 Forecast: Continues to Threaten Support – 21 September 2022

If we do rally at this point, I think that the first signs of exhaustion will be sold into, and therefore it’s likely that we would see quite a bit of downward pressure. In that move, it’s likely that we could go down to the 11,000 level. I think that if the Federal Reserve is in fact going to be drastically hawkish, that could send the market to that level rather easily. Rallies at this point continue to look as they are going to be selling opportunities given enough time.

The 50-Day EMA is sitting right around the 12,500 level and is drifting lower. I think that would be your “ceiling”, therefore it’s likely that they will continue to see plenty of supply above. The tight monetary policy will continue to work against the value of technology stocks, which are going to continue to get pounded as long as interest rates remain high. They have a negative correlation to high-interest rates, so therefore it’s likely that we will see that play out over the longer term. If we were to turn around and break down below the 11,000 level, then it opens up a fresh leg selling. I would not be surprised to see that, because not only do you have to worry about the Federal Reserve, but we need to worry about several other things as well.

The global economy is in serious trouble, and we are teetering on the verge of something rather nasty. It’s been interesting that we have been able to stay somewhat afloat, but it’s hard not to believe that we still not have priced in all of the potential global headwinds. I will not be a buyer of this index as long as the Federal Reserve remains very hawkish, which is going to be for the next several meetings, at the very least.

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