The NASDAQ 100 initially fell during the early hours on Wednesday, reaching down to the 13,100 region. However, just as we had seen during the previous couple of sessions, there is a significant amount of support that comes into the picture. The market has been squeezing for the last 3 days, that makes a certain amount of sense considering that there is a major holiday on Friday.
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The fact that Friday is Good Friday, meaning that stock markets in the United States are closed means that there is a significant amount of hesitation to put a lot of money to work. After all, the Non-Farm Payroll announcement comes out on Friday, and there will be no way to react to it. Because of this, a lot of traders have simply decided to step away from the market this week, especially as it is a little overextended.
The NASDAQ 100 will also have to deal with the idea of further noise coming from the earnings season and a couple of leads, and of course has to deal with the fact that we are entering the blackout period for companies to buy their stocks to lift prices. In other words, we could have a lot of noisy behavior in general. Ultimately, this is the biggest problem that this market will have, as volatility typically does not do good things to the NASDAQ 100. A bit of a pullback from here does make a certain amount of sense, but it’s also worth noting that there are a lot of buyers underneath. This pullback could very well drop down to the 12,850 level or so, where we had previously seen a lot of resistance behavior, so a certain amount of “market memory” should come into the picture.
That being said, if the market does break above the 13,250 level right away, that opens up another 500 points of the upside, and what has been a very strong uptrend over the last couple of weeks. That being said, bit of a breather makes sense, and it also gives the bulls a chance to collect more buyers along the way.
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