The Nasdaq 100 initially shot higher during the trading session just after the New York open, but then gave back gain rather rapidly as we continue to worry about interest rates rising. Remember, technology stocks tend to be very sensitive to interest rates rising, so therefore the 10-year yield needs to be paid close attention to.

It’s also worth noting that we are sitting in an area that previously had been supported, so the fact that we break above it and then pulled back toward it does suggest perhaps we are trying to work through some of the “market memory” in this area. We are still decidedly in a downtrend, even though we have had a shot higher over the last several days. The 50-Day EMA sits near the 11,750 level and is dropping. With that being the case, it does make a certain amount of sense we should continue to see downward pressure and that level as a potential resistance barrier. If we could break above there, then it’s possible that we could go looking to the 12,000 level.
 

Likely to Continue to See a lot of Back and Forth

• Underneath, if we were to break down below the candlestick for both Thursday and Wednesday, then it’s possible that we could go down to the 11,000 level rather quickly, perhaps even lower than that.
• It would just be a simple continuation of the overall downtrend.
• In fact, if you squint your eyes, you can see that we are in the descending channel.

Tesla had a less than enthusiastic earnings report before the session, so that may also add to some of the malaise in this market, as we continue to see a lot of questions asked about the global economy, the Federal Reserve, and of course the bond markets. I think this continues to be a very noisy market, but that’s going to be the same for almost any risk asset, making the Nasdaq 100 less unique than it normally is. As we are during earnings season, it’s very likely that we will continue to see a lot of back and forth, but forward guidance in this environment cannot be good for most companies. With that, I suspect that it is probably only a matter of time before signs of exhaustion get sold into at the first signs of trouble.

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