The Nasdaq 100 has been positive on Monday, as we continue to move to the whims of Middle East headlines and interest rates in the United States more than anything else.
NAS100
The Nasdaq 100 was positive during the trading session on Monday to break above the 200-day EMA but has pulled back just a bit to show signs of hesitation. Ultimately, this is a market that if we can clear the 24,250 level cleanly, that could send this market much higher. This would be the longer-term bullish set up that I am watching for.
Short-term pullbacks open up the possibility of buying opportunities with the 23,800 level being a bit of a floor. Anything below there then has the Nasdaq looking very weak again, so I would be somewhat cautious at that point.
The Impact of Interest Rates
The 10-year rates in the United States continue to jump back and forth across the 4.30 level, which of course is a level that has been very important for some time. Rates are a little bit above there right now and that might be part of what is causing problems for the Nasdaq. This continues to be a major issue, as people continue to choose yield over all else.
The uncertainty in the Middle East is the driver of the rising rates. With that being the case, I think it does make sense that the market, despite the fact it has been fairly reasonably reliably unwilling to sell off for longer periods of time, the reality is we have a lot of work to do before we get a big move to the upside. The market will continue to pay close attention to risk appetite in general and as traders are pricing out the idea of rate cuts anytime soon, this does work against tech stocks and that's part of what's going on.