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US Nas 100
Short
Updated

Short $NDX $QQQ on multiple overbought signals

915
We are getting many overbought readings after the "all in" moves of the treasury and #FED the last 2 days. Seasonality says we should expect a short here for 1-2 weeks, even more so during election years.
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Highest reading on percent stocks above the 20 DMA since March 2009 snapshot
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Completely different environment back then as we had a major double bottom in the market already and the advance was a full breadth "steady pace" advance. It was not the rocket ship we have today from the bottom straight to overbought conditions. Still, we did get a 1-2 pullback after this % stocks above 20 DMA reading. snapshot
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Market update Sunday APR 12

youtube.com/watch?v=EQx7mAke2R4
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Markets may catch up to seasonality here and start showing a decline. This is election year seasonality for DJI for the previous 8 elections. On average we descend into May and form the low for the year before increasing to September/October right before the election, followed by a selloff in anticipation of the election.
snapshot
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NQ and AAPL reclaimed the 61.8% recovery level and the 50 DMA. These are not the things to short, it is in fact dow jones and russell 2000 futures which are still lagging far behind. DJI futures (YM) have been stuck at the 21 donchian close channel and the 50% fib level. This doesn't bode well. Absolutely terrible bank earnings so far. snapshot
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Near the highs today I shorted 1 contract of RTY russell futures. Expecting a 100 point drop back to the daily ATR stop.
Trade active
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1247 average entry russell 2000 futures short. Target below. snapshot
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Banks weak, text book AB=CD, donchian, larry connors RSI overbought. snapshot
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Staying away from NQ. Still in the russell shorts doing well. First target is the Day ATR stop in green below. Notice that as soon as the flip to green happened the countertrade started. snapshot
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SPX futures are getting the Larry Connors RSI crossunder here as well, after doing something very similar to DJI and Russell futures. snapshot
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We got our first immediate pump and dump jobs numbers. Apparently 25% unemployment rate is too bearish. Target APR 7 gap on both DJI and Russell futures. snapshot
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That AAPL downgrade was well timed for NAS100 haha snapshot
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You can't gap above the 50 DMA like this at the end of a big rally and not expect professionals to dump positions. We are getting major SPY sell blocks today.

Reference DEC 3 2018 for a similar condition of gapping above the 50 DMA followed by heavy selling. It seems all good news had been realized.

snapshot
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Suspect a big selloff monday. Reference DEC 3 2018 again to see something very similar. We are completing a doji candle and gap above the 50 DMA to finish this move up. snapshot
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Oil June (M) contract is tanking again, we are definitely playing out something very similar to DEC 3 2018 with a gap above the 50 DMA. snapshot
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Today was the lowest volume day since the March 23 bottom. The majority of the volume occurred at the highs with a huge ramp at 3:50 from the MOC cutoff, total Wycoff upthrust. We targetted russell for shorts.

snapshot

All of the notable SPY blocks occurred near the top, beneath them all at the close = distribution.

#ETFBlockSummary
APR 22 2020, 4:01 PM EDT

VOL (K) | PRICE ($) | 🔼
--------.-----------.----------
📈 SPY
--------.-----------.----------
500 | 280.25 | 💔 -0.48%
500 | 280.15 | 💔 -0.45%
500 | 280.12 | 💔 -0.44%
500 | 280.08 | 💔 -0.42%
650 | 279.99 | 💔 -0.39%
2,000 | 279.80 | 💔 -0.32%
500 | 279.50 | 💔 -0.21%
750 | 279.10 | 💔 -0.07%
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Watching this area close. We could move up into the FOMC statement wednesday as that is what seasonality calls for, then a dump to May 26. snapshot
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Russell had a final catchup move today ahead of the FOMC, but failed to reclaim the 50 DMA after tagging it. There were many MOC orders submitted to dump this index toward the close at 3:50 ET. I suspect this is a final move to tag the 50 DMA just like SPX, NDX, and DJI. This is not bullish at all to me.

snapshot
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Today was a big day. Overnight burst at 5 AM ET with oil, however NAS100 gave it all back and filled the Monday close. SPX500 futures are at an interesting location here backtesting the broken wedge again.

snapshot
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SPX500 nearly made it to the 61.8% retracement level and the big FEB block level for SPY at 293.13. These are in the same location. There is huge confluence at ES 2930. If we make it there I will short more.

I am carrying a decent short at this point and am willing to hold it through seasonality for election years which starts this week ahead of the FED and into late May.

Reference here for Seasonality on DJI for election years. On average there is a drop on the last week of April or first week of May into the bottom of the year near May 26.

charts.equityclock.com/dow-jones-industrial-average-four-year-election-cycle-seasonal-charts
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SPY block levels

snapshot
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Now this is what I call selling. Holy moly.

#ETFBlockSummary
APR 28 2020, 4:15 PM EDT

VOL (K) | PRICE ($) | 🔼
--------.-----------.----------
📈 SPY
--------.-----------.----------
3,000 | 291.00 | 💔 -1.74%
600 | 287.40 | 💔 -0.51%
300 | 286.92 | 💔 -0.35%
1,010 | 286.56 | 💔 -0.22%
758 | 285.82 | 💛 +0.04%
--------.-----------.----------
📈 QQQ
--------.-----------.----------
248 | 217.32 | 💔 -2.66%
1,020 | 213.00 | 💔 -0.69%
250 | 212.82 | 💔 -0.60%
350 | 212.50 | 💔 -0.45%
--------.-----------.----------
📈 DIA
--------.-----------.----------
116 | 242.18 | 💔 -0.46%
--------.-----------.----------
📈 IWM
--------.-----------.----------
200 | 130.87 | 💔 -1.43%
280 | 130.80 | 💔 -1.38%
1,920 | 130.40 | 💔 -1.07%
434 | 129.85 | 💔 -0.65%
1,675 | 129.40 | 💔 -0.31%
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Seasonality ends today with the FED. NQ got the March 3 high and a double fork tap. SPX500 got the 61.8% retracement level and nearly to the 2950 original target. snapshot
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Not a time to long this market, it's a time to close all longs. Potential impulse wave completion here against Month CAM R4. snapshot
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ES hits a key area around the 61.8% retracement as NQ hits the 78.6% retracement where Month CAM R4 is in the above picture.

I am not buying this. If seasonality holds this year the same way as April 2019, we will descend to late may (Sell in May) upon capitulation buying into the FED. This is a well documented setup and I should have waited for it from the beginning. snapshot
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Wave 5 of 5 of 5 created for this giant impulse. Super hard to create. The general target by May 25 will be the 200 Week MA down near the bottom of outer (red) wave 4.

snapshot
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Possible prediction into May as we unwind each impulse wave by creating larger and larger head/shoulders patterns. snapshot
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Locked in on russell shorts from the APR FOMC close. Up 120 points or nearly 10% since. Great trade and a super bearish piercing line tweezer top. snapshot
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Looks like a capitulation wave on NQ which is on another planet. We are doing very orderly structures here and setups for ES however. I suspect the next wave down starts somewhere around here to complete the move on Month CAM S3 for May. We can surely go up from there to June 15. snapshot
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NQ full fork retracement friday as ES taps on the 61.8% threshold again. snapshot
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My expectation over the next 1-2 weeks for ES to close out May seasonality. After that longs are in play again.

snapshot
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Russell
snapshot
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DJI Log chart. snapshot
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Took out an ES June 2800 put option here as the formation of this structure is near perfect with AB=CD complete and outer AD retracement near 88.6%. snapshot
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Big VIX move. Broke the descending wedge. Question is how high can it go. Russell and Down are doing exactly what they are supposed to be doing. snapshot
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Russell nears final AB=CD target of 1187. I suspect a big bounce there with the 21 day donchian close channel snapshot
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This could be the "re-alignment" with May seasonality that we are supposed to experience in election years. The bottom is typically May 22. snapshot
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Russell getting very close to the AB=CD target @ 1187.
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All targets hit on russell except 21 day donchian close. snapshot
Trade closed: target reached
Final update to this trade, closed 90% of shorts at target AB=CD level for Russell futures.

Good luck. More to come.

youtube.com/watch?v=91oMZ0F_0ac
mortdiggiddy
Find the edge.

Website: daily-edge.com
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nasdaqOscillatorsSeasonalityTrend Analysis
mortdiggiddy
Find the edge.

Website: daily-edge.com
Twitter: twitter.com/dailyEdgeGroup
Youtube: youtube.com/c/TheDailyEdgeTradingGroup
Telegram: t.me/mortdiggiddy
Paypal: paypal.me/mortdiggiddy
Also on:

Related publications

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.