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MENAFN- Daily Forex) Potential signal:
If we break back above 21,000 I would be a buyer. Stop loss at the 20,650 level, and a target of 21,850 above.
You can see that we did initially try to rally during the trading session on Friday, but got absolutely hammered, mainly due to fears of the Federal Reserve standing pat with interest rates for a while. I think they are. So that does have an outsized effect on technology and higher risk stocks, such as you see in the NASDAQ 100, and it's not a surprise to see that we have fallen. The question now is, can we bounce? I do think eventually we will, because sooner or later people are going to look at the hotter than expected jobs number and realize that although rates will stay stubbornly high in the United States, it's a strong economy, and somebody might actually spend a few dollars, thereby increasing profits for some of these companies. Nvidia was a big drag on the index. That's an entirely different situation as there are concerns about banning the export of AI chips with a decision coming fairly soon. That obviously has caused a few headaches over there.
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That being said, this is a market that I think eventually will recover, but it needs to take back the 21,000 level to be convincing. If we don't then it wouldn't surprise me at all to see this market drop down to the 20,000 level where we will intersect and start dealing with the 200 day EMA. That might be a good thing. I'm not ready to start shorting this market, but I'm not going to jump in and start throwing a bunch of money at it because it looks a bit like a dumpster fire right now. However, keep in mind that this is the first place people will start throwing money at if they feel like taking on risk yet again, which is the default for a lot of traders.
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