The Nasdaq 100 has run into a tough patch of selling since Friday, as of this morning via futures trading the index is near the 24,918.00 level as continued pressure downwards seeps into the market.
Since approaching 25,900.00 last Wednesday and then again on Thursday, the Nasdaq 100 has found rough results. Friday’s lurch downwards was steep and a fall to around 25,140.00 has not stopped the selling. Yesterday’s trading produced more selling trajectory in the Nasdaq 100 and late last night and into this morning the 25,000 ratio has been penetrated lower. Positive impetus seems to be in short supply for the moment, this as investors look for good news to reverse course.
Typically I would write that the selling being seen is likely simply profit taking in a marketplace that has built up a lot of froth and is seeing large traders cash in some winnings. Sunnier days are frequently promised via the major indexes in the U.S, but sentiment this time around appears to be rather cautious as the holiday season starts to draw closer. It appears in some respects folks are talking themselves into cautious fears regarding the potential of AI having hit values that are overdone, and a backlash may be developing.
Day Traders and Riding Trends
With the Nasdaq 100 now situated around 24,918.00 and showing signs of additional pressure, day traders need to understand a couple of core facts. Their limited positions in cash markets do not effect the outcome of the index – big players are the ones who move the market. And day traders are allowed to short the Nasdaq 100 via their brokers platforms using CFDs if they choose. Meaning that a trader doesn’t only have to buy the Nasdaq 100, they can sell it too and then buy it back (making themselves flat – closing the position).
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The developing trend lower in the Nasdaq 100 looks as if it may have staying power as the Christmas and New Year’s holidays approach. Speculators need to understand they can ride the trends created by large traders. However, and importantly, intraday trading on the Nasdaq 100 can be extremely dangerous and reversals are always a threat. And the idea that at some point large players will believe the Nasdaq 100 has been oversold will be seen.
Thinking About Support Levels
With a one month technical chart a day trader can simply see the Nasdaq 100 has been lower in the past handful of weeks.
- Cautious trading results were certainly seen leading up to December, when the Nasdaq 100 started to climb again and create some optimism that new highs could be challenged.
- Shifting sentiment has been abundant in the stock markets since the high water marks seen in the Nasdaq 100 in late October.
- Values are now touching ratios seen in the first week of October.
- It might seem a long distance away, but perhaps large players are viewing the 24,500.00 ratio as a legitimate low target.
- However, support levels around 24,800.00 to 24,700.00 should be watched near-term.
Nasdaq 100 Short-Term Outlook:
Current Resistance: 25,020.00
Current Support: 24,875.00
High Target: 25,350.00
Low Target: 24,630.00
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