NASDAQ 100 Technical Analysis

You can see that we initially did try to rally during the trading session here on Wednesday, but the CPI numbers came out a little bit hotter than anticipated and therefore we’ve seen a bit of a knee-jerk reaction to the downside. The question now is whether or not it sticks. I don’t think it does. I don’t think it’s changed that much. I just think that a lot of algos got caught on the wrong side of this trade.

The 50 day EMA is going to offer a little bit of support and we already start to see a little bit of a balance here. So I suspect that by the end of the day, we will probably see the market try to recover. Whether or not it can remains to be seen. And I do think at best, we’re probably looking at sideways trading. I don’t necessarily think that we’re going to explode to the upside.

It would be a signal that we are going to work off some of the excess froth, something that is desperately needed at this point. The 17,775 level is an area that I think continues to be massive support. And as long as we can stay above there, I think we’re okay. If we do break down below there, then it’s possible that we need to look at this more or less through the prism of a pullback to refresh the uptrend, but I don’t think things have changed so much that you need to be overly worried about it if you’re bullish.

This may in fact end up being a nice short-term buying opportunity. Above, I believe that the $18,500 level is a significant barrier that you need to pay close attention to, as it is massive resistance. So, all things being equal I think we go sideways and start to bounce a little bit back into our consolidation range.

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