Nasdaq 100: Next Few Weeks Will Be Vital

If the reason behind Friday’s sell off is due to events half way around the world, then someone needs to inform volatility traders they are bidding up the wrong market. Also, stock traders are focusing on selling the wrong stocks as well. The headlines say Ukraine is weighing on the markets. I find it interesting that with international issues dominating the headlines that domestic stocks are the ones coming under pressure.

The Nasdaq, as you can see, tried to rally during the course of the week, but found far too much in the way of resistance just below the 4200 level to continue. With that, the market pullback to form a shooting star. Now we find ourselves with a very sign just above a significant bottom in the market. With this, we feel that the next couple of weeks could be vital to the Nasdaq, and show where the next moves heading towards.

If the Nasdaq does in fact break down from here and below the hammer from the previous week, we feel this market could come undone at that point. Granted, it has been a nice there step type of action higher. But, we have to recognize that we have broken down below a trend line that is positive, and have retested it from the bottom. We failed, and as a result the nasdaq suddenly looks like it could be a bit vulnerable.

On that move, I believe that the market will probably look for 3340 at first, but possibly 3300 as well. With that, we feel that the move could be fairly sudden though, and it really comes down to whether or not we get the right headline to push the market over the cliff so to speak.

I don’t necessarily think the markets ready to break down quite yet, but have to bring that to your attention as it is a potentially market moving event. The next candle or two would be very important, and as a result we will be paying quite a bit of attention to this market. On another note, if the Nasdaq moves drastically, it will be a sign of risk appetite. This could send all stock markets in the same direction.

A rise to the 3590 with the inability to move the region 3620-30 and a strong decrease.

Now we will focus on the current situation: It seems that the index will move toward the blue strip which lies in 3340. On the other hand a move above resistance level is set in 3590, when a minor resistance level lies in 3560. Under the strip following support levels are 3303 3240-80.

And key level of 3150-70