Nasdaq Analysis 09/12: Flirtatious High Ground (Chart)

(MENAFN- Daily Forex) The Nasdaq 100 this morning via futures trading is near the 25,700.00, this as large players try to take advantage of perceived optimism and the Federal Reserve's looming interest rate decision on Wednesday.

Yesterday's highs for the Nasdaq 100 reached the 25,865.00 vicinity which was a hair length's distance above Friday's values. The current value of the Nasdaq 100 via futures trading this morning is near the 25,700.00 level with quick action being seen. Today and tomorrow's trading on the Nasdaq 100 will remain swift as financial institutions battle for positions before the Federal Reserve's FOMC Statement late on Wednesday. And after the interest rate policy is pronounced (rate cut expected of 25 basis points) and outlook is given, day traders should expect even more fireworks on the Nasdaq 100.

Yesterday's miniscule climb above Friday's apex shows that bullish sentiment is simmering. However, it appears large players want to hear the Fed's FOMC Statement before they fully commit to more buying power. What would provide more impetus for buyers would be a more dovish U.S Federal Reserve.

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Speculators need to remember their daily bets on the Nasdaq 100 are different compared to long-term investors looking to park money and profit for the long haul. Day traders looking for higher ground amidst a sea of volatility have a variety of dangers they face that long-term investors are not bothered with via intraday results. The fact that the Nasdaq 100 is again within sight of higher realms made in late October is intriguing, the flirtation may prove to be real over the coming days if certain goals are met, but that might not happen.

Cautious sentiment might sound odd when the Nasdaq 100 continues to traverse within its higher realms, but for the past handful of weeks the index has provided consistently choppy results as folks battled the government shutdown cloud and the Federal Reserve trying to sound as conservative as possible. However, the Fed does seem to be in a position again that makes an interest rate cut tomorrow necessary.

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It is most likely the Fed will cut its Federal Funds Rate by 25 basis points tomorrow. If the Fed doesn't cut interest rates it will create a lot of sudden selling on the Nasdaq 100 and other indices.

• Investors have certainly positioned for Wednesday's rate cut.
• Thus, the Fed's rate decision for tomorrow has already been factored into the stock markets.
• What has not been factored into the Nasdaq 100's value is the Fed's mid-term outlook.
• If the Fed suggests a couple of more interest rate cuts are possible over the next handful of months this could trigger more buying of the Nasdaq 100.
• Before tomorrow's Fed Statement, trading could be choppy.
• Support levels perceived technically may be the place that conservative speculators may consider buying the Nasdaq 100 while looking for some upside action.
• Risk taking tactics should be used carefully over the next 48 hours.

Nasdaq 100 Short-Term Outlook:

Current Resistance: 25,720.00

Current Support: 25,635.00

High Target: 25,890.00

Low Target: 25,475.00

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