If interest rates start to shoot higher, then it almost certainly will work against the value of the NASDAQ 100.

The NASDAQ 100 did not do too much during the trading session on Thursday, gaining 1%. It was a relatively positive day, but it’s also worth noting that the Chairman of the Federal Reserve speaks Friday morning at the Jackson Hole Symposium, and traders around the world are trying to figure out whether the Federal Reserve is looking to ease its monetary policy.

Inflation data does not suggest that they should be doing that, but the Federal Reserve has created this monster. After all, they have had a long history of making sure Wall Street gets paid, via cheap money. Now that Federal Reserve governors are not allowed to actively trade in the markets, they may not be as inclined. They have created a generation of traders that have no idea what it’s like to trade in an inflationary environment, or trade without the Federal Reserve looking to bail everybody out at the first sign of trouble. In other words, the markets have been so distorted for the last 14 years that it’s difficult to see how we get out of that machine.

Traders Waiting for Jackson Hole Symposium

• Nonetheless, after he speaks during the session on Friday, if we break down below the 50-Day EMA, then it’s possible that the NASDAQ 100 drops to the 13,000 level, possibly even the 12,000 level.
• On the upside, the 13,500 level is an area that has offered resistance previously, so it’s possible that we could see that as a short-term ceiling. If we were to break above there, then that could change things, turning the market into more of a “buy-and-hold” type of situation.
• If that happens, the market is likely to go looking to the 15,000 level. That would also see certain stocks such as Tesla, Amazon, Microsoft, and the like going higher.

If interest rates start to shoot higher, then it almost certainly will work against the value of the NASDAQ 100, and it’s also probably worth noting that we have recently pulled back from roughly the 50% Fibonacci level. This is a market that I think continues to see a lot of volatility, and I’m almost positive Jerome Powell do something to mess this entire situation up one way or the other. Because of this, be cautious about your position size, and recognize that you will need to be very flexible.

Ready to trade the NASDAQ? We’ve made a list of the best CFD brokers worth trading with.

The S&P 500 plunged significantly during the trading session on Monday, as we have seen a lot of negativity. The market continues to see a lot of noisy behavior, as we are heading into the Jackson Hole Symposium week. By selling off the way we have, it’s obvious that traders are suddenly starting to worry about central bankers and whether or not they are going to continue to argue for tightening monetary policy.

It is likely that we will continue to see reasons to do so, as inflation has been extraordinarily strong. With that in mind, the market is likely to continue being a bit skittish, and it is probably worth noting that we are sitting right on a “ledge” that had formed previously in the form of the 4135 if we break through this area, that could be the beginning of a rather significant selloff.

If we rally from here, the 200-Day EMA is an area that I think a lot of people would pay close attention to, because it is a rather bullish thing to overcome. At that point, the market is likely to look into the 4300 level. I don’t necessarily think that’s going to happen easily, and I would fully anticipate that the Jackson Hole Symposium is a long litany of central bankers going on about how they need to tighten monetary policy. In other words, we may have seen the top of the rally. However, we do not know what happens until it happens.

Forecast for S&P 500

If the market were to break above the highs right around the 4300 level, that would be a very bullish sign, perhaps sending the S&P 500 to the 4500 level. I don’t necessarily know the reason for that happening. It is rather amazing how Wall Street can find one reason or another to get bullish, most of the time involving the idea that the Federal Reserve is going to continue to be dovish. I’m not sure what else the Federal Reserve can do to convince Wall Street that it is serious, but something tells me this week we will see everything but dovish behavior coming out of central bankers, with perhaps the exception of Japan. With this, I think rallies will get faded at the first signs of exhaustion as well. I have no interest in buying into it make it fresh, new high.

Ready to trade our S&P 500 daily forecast? Here are the best CFD brokers to choose from.

• Spot gold markets have fallen roughly ½% for the trading session on Friday, as we are threatening the $1750 level.
• The market is likely to continue to see a lot of noisy behavior.
• Need to be paying close attention to the bond yields in America and other major economies as gold is highly sensitive.

Furthermore, it’ll be interesting to see how next week plays out due to the fact that the central bankers are all meeting at the Jackson Hole Symposium. There will be a lot of talk about fighting inflation, which should continue to put pressure on the upside on bond yields. It’s much easier to own bonds and earns a yield than it is to hold gold and store it which of course has costs involved. In other words, this is a market that has a lot to look at next week.

If we do break down below the $1750 level, it’s likely that the market will go to the downside and look toward the lows at the $1680 level. The $1680 level underneath should be supported, as we have bounced so hard from there. If we were to break down below there, then the market is likely to go down to the $1600 level. This would almost certainly accompany a strengthening US dollar, so pay close attention to the US Dollar Index. Higher interest rates will cause a chain reaction in this market.

If the market were to turn around and rally from here, I think there is a significant amount of resistance above, especially near the $1800 level. That’s an area that has a lot of market memory built into it, as it had been massive support previously. I think that this is going to be a “pay the rally” type of situation, at least until we can break above the 200-Day EMA. We have a long way to go before we go there, and therefore it’s likely that you would see more of a “fade the rally” type of attitude going forward. Remember that the US dollar is like a wrecking ball against most assets, and of course, gold won’t be any different. Expect volatility, and keep your position size reasonable, as the noise in this market can be very challenging to say the least.

Ready to trade today’s Gold forecast? Here are the best Gold brokers to choose from.

I anticipate that at the first signs of exhaustion traders will willingly jump into this market and start shorting again.

The S&P 500 was noisy during the Friday session as traders started to focus on the Independence Day holiday. It is worth noting that although there will be a certain amount of electronic trading in the futures market, the underlying index will not be operating. Because of this, liquidity will be a major issue as it is Independence Day in the United States, and quite frankly most participants won’t be involved in the futures market either. You could see rather significant jumps in the price of the futures contract in this scenario, so be cautious about trying to trade this market.

However, when you look at this chart it does tell you that at least there was an attempt to save the S&P 500 on Friday, suggesting that perhaps it is only a matter of time before we get a bit of recovery. The 3900 level above causes a bit of resistance on the way up from when I can see, but I think there’s more of a fight near the 4000 level. The 4000 level also brings in a bit of psychological resistance and the 50-day EMA. In that scenario, I think it’s going to be difficult to get above there, but if we do then I anticipate another leg up to the 4200 level, an area where we have seen quite a bit of selling pressure previously. Anything above that level could change the overall trend, but right now that seems to be unlikely.

As long as the Federal Reserve is going to tighten monetary policy, I find it difficult to think that the S&P 500 has a real shot at a decent recovery. With that in mind, I anticipate that at the first signs of exhaustion traders will willingly jump into this market and start shorting again. Quite frankly, there is a lot of negative news out there, but we have not priced in a lot of the earnings recession that is almost certainly coming down the road. Because of this, I think that the earnings season noises are going to be extraordinary this time and will continue to put a little bit of an anchor around the neck for this market. A breakdown below the lows opens up the possibility of 3500, which I do think is a realistic target over the next several weeks.

I think we are more likely than not going to see a lot of chop, with more of a proclivity to drop.

The euro initially fell on Wednesday only to turn around and rally again. The 1.05 level looks to be offering significant support, at least in the short term. Underneath, there was a “double bottom” that formed, and it’s possible that people are trying to front-run the Federal Reserve and the fact that it will have to change its opinion on monetary policy sooner rather than later. Furthermore, there has been a bit of chirping out of the ECB that they may have to tighten interest rates.

If that is in fact going to be the case, then the euro will more likely than not recover a bit. Having said that, this is a market that continues to be very noisy, as is typically the case. This is one of the worst pairs to trade, because most of the time it goes back and forth with no real directionality. This is why you need to look at it from the prism of a longer-term trader, which still looks at this as a major downtrend.

I believe that the 50-day EMA above will continue to cause headaches, and if we approach that area, I would anticipate that there is probably a certain amount of resistance to be found in that area. If we break above there, then the 1.08 level becomes an even bigger problem. Ultimately, it would take quite a fundamental shift in attitude to make that happen, but the volatility of this market and everything else is so out of control right now you cannot bank against anything. Because of this, I think we are more likely than not going to see a lot of chop, with more of a proclivity to drop. If we can break down below the 1.04 level again, that could open up a move down to the 1.02 level, and then possibly parity. I do think that parity is a very real possibility sometime later this summer, as many of my contemporaries feel the same way. Rallies are not trusted right now, and I think that will continue to be the case as there are so many concerns when it comes to the global growth situation. As long as there are concerns about global growth and economy slowing around the world, there’s always going to be demand for US dollars.