• The Nasdaq 100 initially tried to rally during the trading session on Wednesday but then got hammered after the Bank of Canada decided to raise interest rates.

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• Perhaps people are starting to grips with the idea that inflation is not going anywhere, and central banks are still serious about fighting it.
• Nonetheless, it isn’t easy to start shorting this market because Wall Street has the amazing ability to completely ignore reality and start focusing on the next narrative.

The 14,400 level has been broken down through to the downside, and then it’s likely that we could go down to the 14,250 level. Anything below there will end up being a 14,000 target, perhaps even down to the 13,750 level. The 50-Day EMA underneath continues to offer support, and therefore I think it’s probably only a matter of time before we see an attempt to turn things around.

Traders Should be Cautious

 After all, it’s only a handful of stocks that everybody trades anymore, mainly 7 on the Nasdaq that move everything, so I am waiting to see how this plays out. It’s possible that we could have a couple of negative days, but at the end of the day we are still dealing with the same people who will focus more on liquidity than anything else.

All things being equal, this is a market that I think given enough time will find plenty of buyers, because people are creatures of habit, and Wall Street is the ultimate place where you see that. There will be people out there looking at this pullback as an opportunity to buy the Nasdaq 100, so I think ultimately this is a situation where we could see a lot of volatility, and therefore you probably are better off waiting to see whether or not the market can stabilize, and then start to turn around and show signs of life. You will have to be extraordinarily patient, and although I think that we may have more negativity ahead with the Nasdaq 100, I think you need to be very cautious, and I certainly would not be a seller of this market. Because of this, it might be a market need to simply leave alone until the middle of next week once we get the statement of the Fed out of the way.

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