• The Nasdaq 100 rallied a bit during the trading session on Tuesday, as the narrative for bullish stocks has returned to Wall Street.
• I’ve even heard some people say that “the war in Israel is bullish!” This tells you that it’s all about flows and narrative more than anything else.
• This is what makes being a macro investor very difficult.

Freepik

All of that being said, the 15,250 level is an area where we may see some resistance. A pullback from here would make a certain amount of sense, you can even make an argument that we are in fact in some type of channel. The channel of course is something that you will be paying attention to, as it is fairly obvious. However, if we were to break above the 15,500 level, then it looks like we are racing to a fresh, new high. Short-term pullbacks at this point in time would make a certain amount of sense, and we should probably also keep in mind that there are inflation numbers coming later this week. That will certainly have people concerned, but at this point, it seems like Wall Street is trying to push the same “magnificent 7” stocks higher. Underneath, the 14,600 level continues to offer a significant amount of support, and I think at this point it’s probably more or less going to be the “lower the market.”

I’ll Avoid Shorting this Market

I do expect a lot of choppy behavior, but the Nasdaq 100 typically is very choppy, so with that being said, none of this should be a surprise. Because of this, you will need to be cautious about your position sizing, and it’s probably worth noting that we are a little stretched in the short term. I would not be surprised at all to see a little bit of a pullback, but that doesn’t necessarily mean that we fall apart. Markets will continue to move right along with the bond market, so you have to keep an eye on the 10-year yield if you want any real shot at navigating stocks, especially in the quicker movers like we have when the Nasdaq 100.

I look for short-term pullback, but I’m not willing to go short of the market, at least not while we are so noisy and it seems like the market just won’t lay down or pay attention to the global economy.

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