- The NASDAQ 100 has had a very positive month of May, and now we are starting to see signs of hesitation as we close out month out.
- I think June is going to be very noisy, and ultimately, I think it’s probably only a matter of time before we see serious sideways action.
- June could very well be the month that we see that happen, because we have seen such a massive move to the upside.
- After all, the market will have to work off some of this excess momentum that has been thrown into it, as we have been slammed lower over the last couple of months, only to see buyers come in and by the NASDAQ 100 hand over fist.
Consolidation Likely
I believe that consolidation is probably the most likely of outcomes, as the market has seen so much in the way of momentum, and now we have to ask questions about whether or not we have any higher. The 20,000 level underneath is probably a major support level, especially as it is not only a large, round, psychologically significant figure, but it is also where the 50 Week EMA currently resides. If we break down below there then I think we see a massive selloff, but right now I think were more likely than not to see it enough traders out there willing to buy each and every dip that we may remain sideways.
If we can break above the 22,000 level during the month of June, and that’s not entirely out of the realm of possibility, then we could see the NASDAQ 100 truly take off. However, I think we have a situation where we just need to go sideways to not only calm down but also give us an opportunity to catch her breath and build up more momentum. We need some type of catalyst to get the NASDAQ 100 truly going higher again, because we have recovered so much of the losses. This will almost certainly come in the form of some type of tariff news.
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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.