- The NASDAQ 100 remains choppy near the 50-day EMA as the market weighs consolidation versus further upside.
- Despite AI-related concerns, dips are still viewed as buying opportunities with a gradual drift higher possible.
The NASDAQ 100 has shown itself to be very noisy, and at this point in time, it looks like it is kind of just hanging around the 50-day EMA. The 50-day EMA is an indicator that a lot of people will watch quite closely as it is trend-defining for the quarter.
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The NASDAQ 100 currently sits just above the 25,000 level and the bottom line of a channel that had been pretty reliable until recently. And I think what we're seeing now is a market that is trying to figure out whether or not we can continue to go higher or if we will just simply consolidate.
Consolidation With an Upward Bias
I suspect consolidation makes quite a bit of sense with more of an upward bias as the Nasdaq 100 will fade into the holiday season. Nonetheless, there are some questions right now about Broadcom and Oracle and the whole debacle with AI, and whether or not artificial intelligence spending will keep up. But we've heard murmurings of this along the way.
And every time it just ends up being a buying opportunity. With the NASDAQ 100 being constructed the way it is, it's difficult to show it anyway. And therefore, I think these dips offer value. We do have the potential for the so-called Santa Claus rally, but right now I'm not even focused on that. I'm more or less just thinking about the likelihood of a gentle drift to the upside, perhaps trying to get to 26,000.
Although it won't necessarily be easy and it certainly won't be a straight line.
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