• The Nasdaq 100 has fallen again during the Tuesday session as we continue to see a major “risk off” attitude enter the markets.
• With interest rates climbing, this most certainly has a negative connotation for markets, and I do believe that we will continue to see them struggle as a result.
• The 11,500 level has a certain amount of psychology attached to it as you would anticipate, but I believe that the market will have to determine whether it’s about interest rates, risk appetite, or both.

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One must wonder whether we didn’t get ahead of ourselves over the last week or so, as traders are betting on the Federal Reserve slowing down. Even if they do slow down interest rate hikes, the reality is they are going to stay tight for longer than most other central banks, and that will put downward pressure on equities. Because of this, I think we got a situation where we are coming to the end of the overall bullish behavior, and it is probably only a matter of time before we see the market make a bigger decision. I do think that it is probably only a matter of time before we get a bigger move, and I suspect that based on the last couple of days, it could very well be to the downside.

The market is Accelerating to the Downside

If we do rally, then I anticipate the 12,000 level above to be a significant amount of resistance, and therefore it’ll be interesting to see if we can get above there. If we can, then the next obvious resistance barrier is going to be nearly the 12,400 level. With that, we would see a major shift in attitude, and almost certainly quite a bit of bullish behavior around the world.

For what it is worth, the market seems to be accelerating to the downside later in the day, which of course has quite a bit of connotation as well, as some of the selling was due to Americans for once, which are notoriously hopeful at the end of the day it seems. With this, I do think we go lower eventually, so rallies might get faded, and a breakdown certainly would get shorted in this environment. We could go as low as 10,800 on a breakdown, which was a significant scene of support previously.

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