Nasdaq 100 Weekly Market Insights - Week of February 10th

Market Analysis for Nasdaq 100 for the Week of February 10th, 2025

Overview:

The Nasdaq 100 has been at the forefront of market gains in early 2025, driven by the tech sector's performance, particularly in AI, cloud computing, and semiconductors. However, after a significant run-up, the index is now confronting resistance, hinting at potential consolidation or a correction, influenced by high valuations and expectations for tech policy shifts under the Trump administration.

Technical Analysis:

• Nasdaq Futures (NQ_F) Key Price Levels:

  • Resistance Levels:

    • 22,400 (major resistance, where recent highs have been tested)

    • 22,250

    • 22,100

  • Support Levels: 

    • 21,950 (key support, recent consolidation area)

    • 21,800

    • 21,650

    • 21,500 (potential for a deeper correction if breached)

  • Pivots: 

    • Daily Pivot around 22,175, suggesting a midpoint for potential market swings this week.

  
  

  The market has shown signs of exhaustion at these resistance levels, with the RSI indicating overbought conditions, which might lead to a correction if bullish momentum wanes.

  
  

• Elliott Wave & Trend Analysis:

  • The Nasdaq 100 could be in a wave 4 correction within a larger bullish trend. A clear break above resistance might signal the start of wave 5, whereas a failure could extend the corrective phase.

Fundamental Outlook:

• Tech Sector Earnings and AI Developments: 

  • Earnings from tech giants continue to drive the index, but there's caution about sustainability at current valuations. AI and tech innovations remain focal points.

• Policy Influence: 

  • Policy announcements related to technology, including AI development and regulation, could significantly impact the index. Investors are watching for any signs of tech policy direction.

• Market Sentiment: 

  • Posts found on X reflect a market with high expectations but also concerns about overvaluation, with some traders looking for breakouts and others preparing for potential corrections.

Options Chain Data for QQQ ETF:

• Call Options: 

  • High open interest at strike prices of 545 and 550, indicating market expectations for a potential rally beyond current levels.

  • The weekly high estimate of 532 from recent posts suggests these calls might be in anticipation of a new high.

• Put Options: 

  • Significant open interest at 525 and 520, aligning with the weekly low estimate, suggesting these could be key support areas where investors are looking to buy dips or protect positions.

  • The neutral range of 518-526 observed in recent posts indicates where much of the market might expect trading to hover.

• Volatility: 

  • The QQQ has shown increased implied volatility, indicating that traders are preparing for potential volatility, especially ahead of key earnings or policy announcements.

Conclusion:

For the week of February 10th, 2025, the Nasdaq 100 is at a critical juncture with resistance at 22,400. Breaking this level could lead to further gains, particularly if tech earnings continue to impress or if policy changes are favorable. However, if the index fails to break this resistance, we might see a correction back to support levels, especially if there's any negative news or if the broader market sentiment shifts. The options market for QQQ shows a balanced approach, with interest in both bullish and bearish scenarios, suggesting investors are ready for various outcomes. Keeping an eye on these technical levels, alongside fundamental developments, will be essential for navigating this week's market dynamics.