• The Nasdaq 100 initially fell during trading on Friday, as the jobs report came out much hotter than anticipated.

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• Because of this, the market has ended up forming a bit of a hammer, which sits just below the recent high.
• In other words, it looks like we are building pressure for some type of breakout, so it’ll be interesting to see whether we get any follow-through. If we do, we could see the Nasdaq 100 takeoff.

In that scenario, I would fully anticipate the Nasdaq 100 (NDX) trying to reach the 200-Day EMA, which is near the 12,500 level. A turnaround at this point in breaking down below the bottom of the candlestick probably tests the 50-Day EMA and breaking down below that could sell off the market quite rapidly. Do keep in mind that we have the December FOMC meeting, and the accompanying statement. That could influence the market but recently Jerome Powell has suggested that perhaps they are at least open to slowing things down, and therefore I believe there probably will be as many surprises as people had once feared.

Liquidity is Going to be an Issue

Ultimately, I think we are probably more likely than not going to see a bit of choppy behavior in this general vicinity, so consolidating would make certain medicines as well. After all, we have gotten through the jobs number, and now we are starting to look at the possibility of simply kicking off the “Santa Claus rally” that so many people look for in the month of December. It certainly looks as if we are going to try to do so, and therefore I anticipate seeing people buying this market to markup their books. After all, they must prove to clients that they own the correct assets at the end of the year, to justify the losses that they have made. A lot of times you will see the market fall right back down after New Year’s Day.

Liquidity is going to be an issue soon, and therefore you need to be cautious about any major position that you put on, but short-term buying on the dip type of situational trading may be possible in this environment, allowing for a bit of noisy behavior. The market continues to be noisy; it certainly seems to be favoring the upside.

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