Yes, this has been a nice significant rally, but at the end of the day, when you look at the longer-term chart, it shows how much further we would have to go.
The NASDAQ 100 Index has broken higher during the trading session on Tuesday as we continue to see a lot of volatility in this market. There’s so much noise out there that you need to be cautious with your position size, as the markets continue to be thrown around by the latest headline. The most important thing you can do is make sure you are trading much smaller positions than usual. The market will almost certainly take your money given half of a chance, but right now it looks like we are more likely than not going to take off to the upside.
Current volatility is making great stock trading opportunities – don’t miss out!
Whether or not we have any real follow-through is a completely different question, and of course, we are in the midst of an earnings season that can cause all kinds of headaches. Keep this in mind, as we will have to pay close attention to the occasional headline that has Wall Street freaking out. There seems to be a narrative out there that the Federal Reserve is going to be switching its attitude over rather soon, and therefore I think the market is probably prone to a lot of erratic movement. In that scenario, the most important thing that you can do is either stay out or babysit your positions.
A break higher could open up the possibility of a move all the way to the 13,000 level. It is at that time point I think the market changes its overall attitude, but right now I just don’t see that being the case. Ultimately, this is a market that needs to calm down a bit before I feel comfortable either buying or selling, because we continue to have a serious lack of volume, and that has a lot of effects on how we jump around. As long as there is no real breadth in the market, it’s difficult to imagine that we have a longer-term rally on her hands, at least anything that could be sustained. We need to get through the earnings season for Wall Street to come up with its next narrative to push this market higher for any length of time. Yes, this has been a nice significant rally, but at the end of the day, when you look at the longer-term chart, it shows how much further we would have to go.
Ready to trade the NASDAQ? We’ve made a list of the best online CFD trading brokers worth trading with.