If we do start to see the stock markets break down a bit, then I would be a buyer of the US dollar, not necessarily trying to short these contracts.

• Looking at the Nasdaq 100, you can see that the market is on the precipice of trying to break out for a big move.
• The 16,900 level is very important, and you need to pay close attention to whether or not we can continue to go higher.
• Ultimately, I do think that we will, mainly due to the fact that the Nasdaq 100 is driven by the same handful of stocks that everybody in the world seems to own.

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That being said, it should probably be called the NASDAQ 7, but fair enough. Ultimately, you are looking to buy dips and dips offer value. The 20 day EMA underneath offers support. And then if we break down below there, we could go looking to the 50 day EMA. In general, I think that we will probably go to the 17,000 level rather quickly, and I do believe that the NASDAQ 100 will continue to lead the rest of the market higher. I believe ultimately, we will see the market pull back a bit after a breakout, but the last couple of weeks have done a lot of good for the NASDAQ 100 as it had shot straight up in the air during the end of the previous year.

Looking Forward

All things being equal, I think we've got a situation where you are either buying a fresh new high or you're buying dips down near the 20 day exponential moving average. The NASDAQ 100 has been leading Wall Street for some time and now traders are going to continue to look to that to push everything higher, not just this index. The NASDAQ 100 will continue to be very volatile so keep your position sign is reasonable, but as you have seen for the last several months, the NASDAQ 100 certainly favors the upside and therefore I think that every time we pull back there are money managers out there willing to chase performance and take advantage of the opportunity to pick up the contract “on the cheap.”

I have no interest in shorting this market anytime soon, and quite frankly I think we are light years away from that happening. If we do start to see the stock markets break down a bit, then I would be a buyer of the US dollar, not necessarily trying to short these contracts.

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