Insights 
VT 
The Nasdaq 100 is building momentum for a potential breakout above 25,392, aiming for new highs amidst continued tech demand and liquidity pressures. The U.S. government’s ongoing shutdown has led to a data blackout, elevating uncertainty and market volatility. Despite this, the index remains bullish, supported above H4 Fair Value Gaps (FVGs), which act as short-term support zones but could lead to further declines if breached.
Approaching Record Highs
The index is nearing record highs as the U.S. government remains partially shut down, halting economic data releases. Market activity is guided by price action and sentiment, despite the lack of new economic data. The bullish trend is bolstered by steady corporate earnings and easing trade tensions, while the absence of fresh data leaves room for potential volatility spikes.
Technically, the Nasdaq 100 is consolidating below its peak at 25,392.88, upheld by two H4 FVGs. These zones are seen as potential liquidity pools and support areas, but failure to maintain them could lead to a market downturn. If the upper FVG (25,289–25,239) holds, there may be potential for reaching new highs, targeting 25,700–25,800. Conversely, if both FVGs are invalidated, the downside may reach 25,152 or lower.
Currently, the market is driven solely by technical factors due to the absence of economic data. FVGs serve as pivotal zones for market direction, and any breach could signal a significant move. In this data vacuum, price action offers the only insights into future trends, suggesting a buildup of tension for the next major movement.
With the U.S. government shutdown now entering its fourth week, we are flying blind without key economic data like CPI and retail sales. The Nasdaq 100 is holding strong near its all-time high, but this stability is fragile and built more on technical support than fundamental conviction. This lack of information means we must lean heavily on price action and institutional flow for clues.
Context & Implications
To add some context, recent private-sector data has been mixed, fueling the uncertainty. Last week’s ADP private payroll report showed a surprisingly resilient 195,000 jobs added in September, which helps explain the market’s stubborn optimism. However, the University of Michigan’s consumer sentiment survey, released last Friday, saw a sharp dip as households grow anxious about the shutdown’s impact, reminding us that risk is building beneath the surface.
Historically, we’ve seen markets often shrug off these political standoffs, assuming a resolution is inevitable. Looking back at the 16-day shutdown in October 2013, for instance, the S&P 500 actually climbed over 3% during that period. This precedent is likely encouraging longs to hold their positions, betting that the eventual resolution will trigger a relief rally.
For bullish derivative plays, the strategy is to watch the Fair Value Gaps at 25,289 and 25,212 like a hawk. As long as the Nasdaq 100 holds above these levels, we can consider buying call options or maintaining long futures positions, using these zones as our line in the sand for risk management. A decisive break above the 25,392 all-time high would be the trigger to add to long positions, as this could force shorts to cover and accelerate the move upward.
On the other hand, we must be prepared for a breakdown if institutional support wavers. A close below the 25,212 level would be a major red flag, signaling that sellers are taking control. In this scenario, buying protective puts with strike prices around 25,150 or 25,000 could offer a valuable hedge against a swift correction once delayed economic data is finally released.
Given the data blackout, volatility is the biggest unknown, and implied volatility on options is likely elevated. We are treating the Fair Value Gaps as the definitive battleground; a hold signals continued strength, while a break signals a probable retreat. Until Washington reopens and data flow resumes, our trading decisions will be dictated almost entirely by these critical technical levels.
