NQ1!, Balance Breakout Remains Intact
Updated
The recent balance, last rectangle on the chart, remains intact. The price is on the path to retest December POC and December high. These are objective targets based on the market action theory. Return into the previous balance would suggests some weakness. It remains to be seen how the price behaves if that return happens. So far the bullish bias is intact as well. AMZN reported last week and pulled back to its support dragging down the NQ price. But it is at the support and support remains support until broken. An interesting fact about the AMZN. Despite having its share buy back program approved for 55B they spent $0 on it and continue to invest money in the infrastructure development. I admire that. I wish other companies followed that example.
Friday was inside day, the price needed to rest and process the previous day breakout. I was watching the price action closely on 5 min timeframe, which is one of my preferred timeframes for day trading. The Globex traders tried to bring the price down but 8:30 EST NFP report push the price right back in. That was a clue to get long at 6872 level, which is November 2018 POC. The price managed to reach the first target - previous day RTH close, but the bulls were not able to reach the second target - January 2019 Close. As I mentioned above the AMZN dragged the price down outweighing AAPL buying.
As I mentioned before, I don't use any indicators. By nature the indicators are lagging and can fool a day trader. Instead, I look at the market action artifacts and use market profile as a graphical tool that helps to cut the noise and visualize the market action. From my experience, this is the only true and unbiased way to trade. The price tells a story.
At this point I consider a few near term scenarios:
- A break above recent high would suggest the continuation of the upside move to retest the December 2018 POC and Hi
- Retest of the recent break out area and consolidation
- Breakdown of the recent balance and move to January 2019 POC. This one could suggest a false breakout pattern and more significant impact.
The market is a complex organism, the scenarios may have deviations and be interrupted by news but the price action analysis is helpful to detect what is supposed to happen and what did not happen and that is a valuable information.
02/02/2019
Friday was inside day, the price needed to rest and process the previous day breakout. I was watching the price action closely on 5 min timeframe, which is one of my preferred timeframes for day trading. The Globex traders tried to bring the price down but 8:30 EST NFP report push the price right back in. That was a clue to get long at 6872 level, which is November 2018 POC. The price managed to reach the first target - previous day RTH close, but the bulls were not able to reach the second target - January 2019 Close. As I mentioned above the AMZN dragged the price down outweighing AAPL buying.
As I mentioned before, I don't use any indicators. By nature the indicators are lagging and can fool a day trader. Instead, I look at the market action artifacts and use market profile as a graphical tool that helps to cut the noise and visualize the market action. From my experience, this is the only true and unbiased way to trade. The price tells a story.
At this point I consider a few near term scenarios:
- A break above recent high would suggest the continuation of the upside move to retest the December 2018 POC and Hi
- Retest of the recent break out area and consolidation
- Breakdown of the recent balance and move to January 2019 POC. This one could suggest a false breakout pattern and more significant impact.
The market is a complex organism, the scenarios may have deviations and be interrupted by news but the price action analysis is helpful to detect what is supposed to happen and what did not happen and that is a valuable information.
02/02/2019
Note
The upside scenario is unfolding so far. The buyers managed to break the recent highs. GOOGL reports after hours and that put the market on hold. While looking at the implied volatility and options expiration the expected move for this week high is 7000 and low 6760. The price is quite close to the expected move high. 02/04/2019
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