Nasdaq 100 Forecast: October 2022

The NASDAQ 100 has been falling for a while, and the month of September has seen even more negativity. The index is full of high-growth companies, and this will be its biggest challenge at this point, as the environment isn’t conducive for these types of investments. The NASDAQ 100 is driven by about 7 companies, and this is something that you will have to keep in mind. It will be the usual suspects, such as Tesla, Microsoft, Amazon, and Alphabet that decide where this index goes next.

The technical analysis on this chart does not look good. The weekly chart is now breaking below the 200-Week EMA, and it is likely to bring in fresh selling. Also, it is worth noting that the high-interest rate environment makes “riskier” companies such as technology ones less attractive. (Why buy these companies when you can make a free rate of return on bonds?) This is an easy way to make money if you are a large fund, and the bond market certainly can absorb a lot of liquidity. Remember, the big money players aren’t going to be able to simply click a few buttons and run to safety. It’s a real challenge in some circumstances, and there are few places where you can safely hide out when you are speaking on billions of dollars.

• The chart looks as if we are going to try to get down to the 10,000 level.
• This will be a psychologically important figure, but at this point, I don’t see why it changes anything other than allowing the market to bounce for the short term.
• For that matter, we may even bounce before then, but either way – we should see selling come back into the picture at the first signs of exhaustion.

One thing can change the overall trend

I would venture that we are about to make a “lower low”, but even if we don’t the upside is probably limited by a few potential resistance barriers. The 11,500 level is an area that could be an issue, but above there I think the 50-Week EMA is a candidate for trouble as well. I would suspect that any rally at this point will be looked at with suspicion, and the first signs of exhaustion will bring in short sellers. However, the one thing that could change the overall trend: The Fed changing its monetary policy. That won’t be happening any time soon.

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