I will be waiting on the sidelines for the next 24 hours until I put any money to work on Monday as it could be a much clearer situation by then.

• The NASDAQ 100 Index has gone back and forth during trading on Thursday
• We continue to see the market focus on inflation and whether or not the Federal Reserve is going to be involved.
• The market is likely to get a bit of resolution after the Non-Farm Payroll number on Friday, as traders are trying to figure out whether or not the Federal Reserve is serious about tightening monetary policy.

It’s amazing how many Federal Reserve members have come out during the past week and discussed that the Federal Reserve is serious about tightening rates and fighting inflation, so you should keep in mind that once the market “gets it”, it could be a very vicious turnaround. However, if the inflationary headwinds start to abate, that could cause another melt-up. When you look at the fundamental information out there, there’s no real reason for this to be happening other than hope

If the market were to turn around and break down below the 13,000 level, that gets in this market much lower, but I think the only thing you can count on is a lot of volatility and noise. The 50 Day EMA sits just below the 12,250 level and is curling higher. That’s an area where people should start to pay close attention to for support, and if we were to break down below that level, it’s likely that this market goes much lower.

I think the only thing you can count on here is going to be a lot of noise, therefore it’s likely that we would see a lot of back-and-forth trading, therefore you need to be very cautious. Nonetheless, it will be interesting to see how we close on Friday because it could give you an idea as to how much faith people have in the market because holding on to a position for the weekend speaks volumes. If the market cannot do so, then it shows you that they have no real belief in this rally, and we probably have further to go to the downside. Either way, I will be waiting on the sidelines for the next 24 hours until I put any money to work on Monday as it could be a much clearer situation by then. However, the proof will be in the price action.

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As far as a longer move is concerned, it will not be until we break out of this channel.

The West Texas Intermediate Crude Oil market rallied a bit on Monday but turned around and fell to show signs of hesitation. Because of this, the market is more likely than not going to continue to be noisy and choppy, to say the least. Because of this, I think you need to pay close attention to the overall channel that we have been in.

The up-trending channel has been in effect since the middle of spring, and therefore it will have a lot of market memory attached to it. The 50-day EMA sits underneath the $103.77 level and is rising, which extends support all the way down to the uptrend line. This is a market that has a lot of questions asked of itself, not the least of which would be whether or not there is going to be demand going forward. Ultimately, this is a market that has to worry about a slowing down of the global economy, and the possibility of a recession. In a recessionary environment, it would make a lot of sense that demand for crude would drop.

On the other hand, if we were to break above the $115 level, then we could go looking to the $120 level above. The $120 level then would allow a potential move to the $130 level. The $130 level is where we stalled previously, so a return to that level would make a certain amount of sense. Ultimately, you need to keep an eye on the barriers that we have been trading in, and then whether or not there is a global appetite for risk out there. Keep in mind that crude oil is a risk-based market, so you need to pay attention to whether or not people are trying to price in those types of trades.

When you look at this chart, you can see that we have been grinding back and forth but with a bit of a significant upward trajectory. Because of this, the market is one that I will be looking to buy on dips more than anything else. However, you will probably have to look at the short-term charts in order to find entries and exits. As far as a longer move is concerned, it will not be until we break out of this channel.