- During the premarket hours on Tuesday, we have seen the NASDAQ 100 rally quite nicely, as we are in the midst of a consolidation area, which of course, is at the top of a very bullish move.
- At this point, the NASDAQ 100 may likely need a little bit of sideways action to work off some of the excess froth, but to expect some type of reasonable selling opportunity is a bit folly at this point in time.
Freight Train
The NASDAQ 100 has been like a freight train since the middle of April, with just a few stops between the beginning and where we are now. I do think that a pullback is more likely than not, but that pullback is going to continue to attract traders who have missed the opportunity to write this massive move higher. The 50 Day EMA is all the way down at the 21,575 region, which is over 1000 points from where we traded currently. Between here and there, we have the 22,250 level, which I think will be an area of importance, as it was a previous all-time high.
At this point, I do believe that the entire world is trying to get long of the NASDAQ 100, and it is worth noting that we have recently seen that there is more money flowing into New York than the other 20 top stock markets, suggesting that the forecast for the decimation of the United States was as usual, a bit of nonsense. When traders look to get involved in growth companies, the NASDAQ 100 is by far one of the first places they look. As things stand right now, they are most certainly looking for growth, especially as it looks like the economic numbers, particularly in the job market, in the United States, are very strong, suggesting that the economy is not going to head into a recession.
Pullbacks at this point in time offer buying opportunities, and you need to look at them as such. Shorting in this type of environment is going to be the same thing as throwing money down a hole. You just cannot do it. Unfortunately, retail traders are prone to look at things as being “too expensive”, but when you look at it through percentage term, it’s a completely different scenario.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.