- The Nasdaq 100 has slipped through a long-running trend line, but the broader uptrend remains intact.
- Key levels at 24,000 and 23,250 define near-term risk, while a break above 25,000 would restore upward momentum ahead of Nvidia’s earnings.
The Nasdaq 100 fell a bit during the trading session on Tuesday, slicing through an uptrend line. The uptrend line has been in effect since roughly the end of May, and now it looks like we are trying to kill off this uptrend line.
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That being said, even if we break down from here, I am not looking to sell this market because it is still very much in an uptrend. Really, it is the 23,250 level that I would be watching for support as the 200-day EMA is racing toward that area. On the other hand, if we turn around and rally and break above the 25,000 level, then that would be a recapture of the upward momentum.
Trendline Breaks Happen
The trend line being broken is not the end of the world. Unfortunately, a lot of people read too much into that, but keep in mind that we are in a situation where earnings have had their influence, but right now, people are paying more attention to central banks and potential interest-rate situations more than anything else. As I record this video, it is the middle of the day in New York, and we are trying to rally, so a bounce from here is a very real possibility.
If we drop and break below $24,000, then I think another $750 is in the cards to the downside. If we recover, then that just shows we are somewhat elevated. We are going higher over the longer term, possibly, or maybe entering an area of consolidation. After all, sometimes trend lines get broken and markets just go sideways. It is not the end of the world most of the time.
The Nasdaq 100 is driven by a handful of companies, and Nvidia's reporting after Wednesday will have a major influence on this index. Keep that in mind as well. Maybe some people are a little worried about that, and that might be part of what the selling has been about. But if Nvidia comes out with a really good report, that almost by definition means that this has to rally.
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