- You can see that the NASDAQ 100 fell really hard during the trading session here on Tuesday as traders continue to sell off from extreme highs, all things being equal.
- This is a market that will be looking towards the 23,250 level for some type of support.
- Traders are looking at this through the prism of whether or not a potential uptrend could hold. We’ll just have to wait and see.
Right now, I do think that we are in fact going to see buyers sooner or later, but clearly the market is not overly excited. And therefore, if we pull back from here, I think a bit of a bounce opens up the possibility of reentry.
Thin Time of Year
Keep in mind that the market is likely to be somewhat thin in this timeframe as it is summer vacation season for a lot of traders. And of course, we have to keep in mind that there are lot of questions going forward about monetary policy. For example, we have the Jackson Hole Symposium that everybody will be watching, especially for Fed Chairman J. Powell to see whether or not he sounds dovish. If he does, that probably helps the stock market.
Having said that, we are also in the middle of rotation because as the NASDAQ falls, we’ve seen the Dow and the Russell get a little bit more love, and that might be part of what’s going on here as well. It’s not really that the stock markets are going to collapse. It’s just that money may finally be moving from the same three or four companies that it had been attracted to.
All these things add up to a buy the dip scenario for me, you’re just going to have to be patient to see some type of reaction in a positive light that gives you the opportunity to get long.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
