The broad marketplace continues to exhibit nervousness. Lows are being achieved this morning in the Nasdaq futures market and the index is traversing near 24,620.00. Support ratios can clearly be seen via six month charts that may make short-term bullish perspectives a bit hard to build momentum. Typically looking for reversals upwards from lows is a rather logical bet by day traders when stock markets are experiencing bullish tendencies. However, the bullish momentum that many traders always envision may not exist at this moment.
The Nasdaq 100 seems to be suffering from fatigue caused by weak behavioral sentiment. It almost feels as if financial institutions have allowed themselves to be talked into negative outlooks. The Nasdaq 100 was traversing the 25,400.00 mark last Wednesday and was showing choppiness. Thursday saw slightly lower heights and a strong selloff, but then something rather troubling happened on Friday depending on your perspective – particularly if a trader believed they should be looking upwards.
Lower Inflation and Stagnation in the Stock Market
Friday’s lower than expected CPI data regarding inflation in theory should have sparked some positive impetus in the broad markets, instead they simply stood in place. The Nasdaq 100 did not put in gains. What happened was the Nasdaq 100 simply sustained its lower depths after suffering a plunge in value on Thursday. Going into the long weekend with a sour taste in the mouth has left speculators feeling more cautious.
This morning’s opening on futures markets has seen selling remain dominant. The cash market for the Nasdaq 100 may deliver positive impetus later today, but then again it may not. The Nasdaq 100 has found it difficult to sustain upwards traction. If the index is not able to move above the 24,700.00 and 24,800.00 levels today, this may be a signal large investors remain nervous and may be starting to value hunt. In other words large players may think the Nasdaq 100 can go lower and that they can find stocks (companies) they like at lower prices in the coming days.
Controlling Fear While Wagering
Day traders need to understand they do not only need to buy stocks. They can actually sell the Nasdaq 100 – shorting the market – and take advantage of downwards momentum. Selling before buying.
- However, many traders including large players do not like to take this tactic.
- Many traders prefer to wait for support levels to create the perception that the Nasdaq 100 is oversold and look for upside.
- However, warning signs for the moment show the Nasdaq 100 is traversing important support that it has battled frequently over the past handful of months.
- If the Nasdaq 100 finds itself on a losing streak and breaks below 24,350.00 and begins to challenge lower depths, this would cause more nervous noise in the marketplace.
Nasdaq 100 Short-Term Outlook:
Current Resistance: 24,685.00
Current Support: 24,615.00
High Target: 24,825.00
Low Target: 24,380.00