Pay close attention to the fact that the bond market was closed on Friday, which was part of the 2D massive squeeze that we had seen.
Stock markets are crashing again
Pay close attention to the fact that the bond market was closed on Friday, which was part of the 2D massive squeeze that we had seen. While I recognize that we broke through a little bit of minor resistance, the reality is that the fundamentals still do not line up quite right for the NASDAQ 100 to take off. Ultimately, the overall attitude of the market will continue to be noisy, so therefore you need to be cautious about jumping “all in.”
The 50-Day EMA has been somewhat important as of late, so it could offer a little bit of support. If we break down below there, then it’s likely that the market will try to fill the gap from last week, which could open the possibility of a move down to the 11,000 level. Anything below there could open a huge move lower.
The Federal Reserve is nowhere near loosening monetary policy, even though Wall Street is kicking and screaming for it. Lael Brainard sounded somewhat dovish during the day, so that may have had something to do with some of the positivity. However, I would point out that late in the day the NASDAQ 100, or the other risk assets out there did not behave very well. Because of this, we could very well find ourselves slipping back into the consolidation area that we had been in for a while. I’m not completely sold on the idea of going higher, but if we broke above the 12,000 level it is possible that we could go looking to the 200-Day EMA near the 12,500 level. Ultimately, I’m still bearish but I recognize that we have a lot of volatility ahead of us, so there’s no need to jump into the market in one direction or the other.
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