Year end Trade Inflation peak / Long YTD losers Short Winners- USD has probably peaked for 2022 post US CPI important release.
- Into year end Trade
- Contrarian Play is to Buy Losers (Coppers, NDX, US Equities, Gold), Sell Inflation winners (WTI, USD, Financial sector, Energy Equities).
- In Commodities I chose WTI as a good proxy
Technicals
Long term Trend is negative on crude since the top in June 2022, we broke decisively on 50-week MA and trading under
Systematic / CTA Positioning is still Long.
Into year end with only 5 weeks left, it's highly likely that the Trend Trade will be unwound, based on very large Standard deviations moves that happened yesterday in macro Space (US10Y, USD, Crude, Equities)
NASDAQ 100 CFD
NASDAQ Small technical pull-back part of the plan.Nasdaq (NDX) is on a short-term technical pull-back after it was rejected on the 1D MA100 (green trend-line). This doesn't change our outlook presented last week:
This profit-taking retracement is part of the greater plan, as the index remains within the tolerance levels of the previous counter-trend rebounds of the 2022 Bear Cycle, all of whom hit the Lower Highs trend-line that started on January 05.
As you see denoted by the green circle, every break above the 1D MA50 (blue trend-line) made a pull-back to test it as a Support shortly after. In terms of RSI, it appears that relative to the rallies of mid-March and July-August, we are where the Red Flag is. After the 1D MA50 pull-back is completed, the minimum target on this bullish sequence is the Jan Lower Highs trend-line, that most likely will make a match on the 0.618 Fibonacci (as both previous rallies) and the 1D MA200 (orange trend-line).
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Nasdaq 100 - Signs of exhaustionSince the latest CPI print NQ1! rose approximately 9%, with most of the move-up being manifested right after the release. The move was accompanied by high volume; however, on Friday and Monday, the volume declined substantially. This continuous decline in volume hints at exhaustion and potential reversal. Therefore, we remain very cautious.
To support our thesis, we would like to see a further slump in volume and the price going up. Then, we would like to see this followed by a spike in volume and the start of selling pressure. Contrarily, to invalidate our bearish thesis, we would like to see the price hold above 11 734$. Additionally, we would like to see the pick-up in volume accompanying a move higher.
On the endnote, we still believe this is only another bear market rally, and because of that, we stay bearish beyond the short term and stick to our price target for NQ1! at 10 000$.
Illustration 1.01
Since the latest CPI print, each session after the print manifested a declining volume from open to close. Yellow arrows indicate these developments on the chart.
Technical analysis - daily time frame
RSI, MACD, and Stochastic are all bullish. DM+ and DM- are bullish as well. Overall, the daily time frame is bullish, although the trend remains weak.
Technical analysis - weekly time frame
RSI and Stochastic point to the upside. MACD tries to reverse to the upside but stays in the bearish zone. DM+ and DM- are all bearish. Overall, the weekly time frame is less bearish than the last week.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Bullish NASDAQ WOLFE WAVE SETUPThere is also a bullish wolfe wave setting up on the 4hr and 3D time-frames which all can be used for supporting evidence that a strong rally is nearing. The projected target is calculated by extending a linear line between pivot 1 and 4 and projecting the line. This is represented as the line perforated line, as shown in the chart. If we extend a vertical line from the apex to the perforated target line, the time and price meet on Nov 29, 2022 at 14400. This is a very aggressive time and price target; however, there is a gap open at $13225 and it will most likely fill this year, so I expect the midterm elections along with tax loss selling and christmas rally into january effect will all contribute to a strong rally. I hope the analysis serves you well and you remain on the right side of the market.
NASDAQ Broke the 1D MA50, targeting 12500.The Nasdaq index (NDX) is making its reversal as following the much lower than expected U.S. CPI report (fell to 7.7% from 8.2% the previous month), it posted the strongest 1 day rise of the year and broke above its 1D MA50 (blue trend-line) for the first time since September 13 (two months). The news that the Fed's approach has started to decrease inflation and the hopes that gives that they may consider easing their rate hike strategy, are fundamentally very bullish for the highly hurt tech sector.
Technically, this 1D MA50 break-out as well as the 1D RSI sequence, is consistent so far with the previous two counter trend rallies in 2022 (March 15 - 29 and June 16 - August 16). Both extended their rallies after breaking their 1D MA50 and topped on the 0.618 Fibonacci retracement level, forming the (dashed) Lower Highs trend-line. The current 0.618 Fib is exactly on the 12500 level.
If that is hit within 7 days, it will make contact with the Lower Highs trend-line as well as the 1D MA200 (orange trend-line), which is intact since April 06. Technically the Resistance level to beat in order to enter a new Bull Cycle is the 1W MA100 (red trend-line), which rejected the August 16 top and has been holding since April 28, being previously the Support of the Bull Run.
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Bounce Now or LaterIf QQQ could try around 260.5 once more time and stay, it'd be healthier. Mostly likely would accur if tomorrow's CPI surprises us again (It doesn't mean QQQ has to go lower after re-touching 260.5). Otherwise, none of the high can stay. So far there were 284 last week and 272 this week, both failed sadly (or happily if you short it).
NASDAQ / US100 AnalysisNASDAQ is approaching the support level & demand zone with bullish divergence, & looks bullish for today.!!
Bullish Signals:
1. HH & HL - Bullish Trend
2. 0.5 & 0.618 Fib Support
3. Demand zone at 10910
4. Trendline Support
5. Bullish Divergence on 15min TF
6. US$ approaching resistance with Bearish Divergence
QQQ - Follow-up after the FED decisionBefore the FED rate hike, we set price targets of 270$ and 260$, with 270$ (and 11 000$ for NQ1!) taken out within a matter of hours and the price drop stopping 0.11$ above the 260$ price tag (before the price erased some of the losses). During the current week, we will pay close attention to the CPI print on Thursday. We expect no significant decline in the figure and, therefore, no room for the FED's pivot.
We believe the bear market is halfway through but far from over. Indeed, the earning season continues to support our thesis about the market progressing into the second stage of the downtrend. Despite that, we are growing anxious and expect a defiant rally down the road, one which will once again make people believe that the bottom is in (only to prove them wrong later).
Unfortunately, though, we do not know when this time will come, and thus we stay very cautious. At the moment, we would like to abstain from setting any price targets. Instead, we would like to wait for the CPI print and update our thoughts afterward. Our price target for NQ1! stays at 10 000$.
Technical analysis - daily time frame
MACD, Stochastic, and RSI are bearish. DM+ and DM- are bearish. Overall, the daily time frame is bearish.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame is bearish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
NASDAQ - 1990's channels vs. 2010's channels - long way downHere is a comparison of the main trading channels for the 1990's run up to the dot com bubble and the 2010's run up to the COVID bubble. We are currently testing the 200-week SMA and at the midline of the green channel (same place as Feb 2001). You can see the top of the blue channel (and bottom of green channel) sitting lower at around 9700, which is the peak in 2020 before the world went crazy with COVID. You can see that a repeat of 2000 crash has a long way to go down from today's price.
The economy actually seems to be quite strong (something like 1.8 job openings per 1 person looking) even if the media keeps trying to convince you otherwise. However, the Fed not letting up on rates is really weighing heavily on the market, especially big tech. I personally would like to think we find support at the 9700 level and hold the green channel for a more steady, controlled rise back to the top of the green channel and test the ATH in 2024-25. However, given the Fed's absolute terrible track record, I expect them to tank the market, and we test at least the midline of the blue channel, which will probably play out as a bounce at 9700 and then a final collapse to the 7000 level to test the COVID low in early 2024.
NAS100 NQ1! NASDAQ 2022 NOV 07 WEEK
NQ1!
NQ is now in Rotation zone 11730 - 10891.
Weekly chart shows first higher close down bar than the
previous down bar, some demand may be expected for
rotational long opportunity.
Possible scenarios:
1) Rotation zone 11730 - 10890: Trades can be executed at
boundary of range, possible target 11345 if long. If Price didn't
manage to reach 11345 or is resisted there, take out your long.
2) Breakdown scenario if redistribution schematic is fulfilled
= Short on test of breakdown of 10890 / 10485
3) Breakout of rotation = long on test if 11730
becomes support
Weekly = Ave vol down bar close off low = some demand
(Note: this down bar closed higher than the last down bar,
rotation possibility continues and demand coming in)
Daily = Higher vol (ave) up bar close off high = some demand
H4 = Ave vol up bar close of high = No demand
Price reaction levels:
Short on Test and Reject | Long on Test and Accept
12987 12140 11730
10890 10485 10000
9748
Remember to Like and Follow if you find this useful.
Have a profitable trading week ahead.
NASDAQ One last Low left on perfect symmetryNasdaq (NDX) is pulling-back following the Fed's +0.75% Rate Hike and a rejection on Tuesday on the 1D MA50 (blue trend-line). With the help of the RSI on the 1D time-frame, we can see that so far the whole bearish sequence since the August 16 High, is very similar to the bearish sequence that followed after the March 30 High.
A striking similarity is that both got rejected on the 0.382 Fibonacci retracement level just under the 1D MA50. On June 03 that was the rejection that delivered the last sell-off before the mid-June - mid-August rally. That sell-off made its Low on the -0.118 Fibonacci extension. On the current Bearish Sequence, this extension is on 10105.
For illustration and better comparison purposes, I have plotted the first two Bearish Sequences od 2022 on top of the current (post August 16 High) and on the blue table all three together. The pattern is obvious.
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NASDAQ - DAILYOn Daily:
price is moving in downwards channel
H&S target and redline marked falls are achieved, after which price is going up
There is another pattern which happened twice before, marked in yellow ovals.
after reaching the trend-line support, price retraces up, and then fall again to re-test the trend-line.
Here price rejected from the orange marked region. This means, price can go back to trend-line, .618 FIB, and daily or weekly support.
IF
the price crosses this orange region, then it can test weekly S&R at 12000ish area. may make LH there, if not ,then it will go to its .618 golden region of rejection, from which it rejected twice precisely.
Nasdaq 100 Index - RSI Positive Divergence on the Weekly ChartJust like on the S&P weekly chart (that I've posted on Oct 13th - S&P is up by about 8% since then), the RSI indicator is showing us a positive divergence on the Nasdaq 100 weekly chart. Fibonacci levels also give us some idea about the movement of the candles. Combining these with the Stochastic, does this mean a shift in the market? Weekly charts take a longer time to develop so I guess we'll wait and see.
NASDAQ Bullish reversal confirmed as per previous 2022 reboundsJust a few days following our last analysis, the Nasdaq Index (NDX) broke above its 4H MA200 (orange trend-line) for the first time since August 26:
As mentioned then, the factor that made the difference in our decision to call for a buy was the RSI Bullish Divergence on the 1D time-frame which has been trading on Higher Highs/ Higher Lows (Channel Up) since October 03, while the actual price action has been on Lower Highs and Lower Lows (Channel Down).
The current rebound is consistent with the previous medium-term rebounds throughout the 2022 Bear Cycle, that started after the bottoms of February 24 and June 16. We can see the very same Channel Up on the 1D RSI during those bottoms. Both of those medium-term rebounds, broke above the 1D MA50 (red trend-line) and targeted the 1D MA200 (green trend-line), which has marginally hit on the March 29/30 High and approached on the August 16 High. Interestingly enough, the RSI Channel Up patterns broke to the upside around the time the price broke above the 4H MA200.
With the 4H MA200 broken, our short-term target is now the 1D MA50 and the medium-term 300 points below the 1D MA200. The projection from where we stand today, puts the 1D MA200 just above 12500 by mid November.
For comparison purposes in order to get a better understanding of Nasdaq's proportionate position compared to the previous rebounds, we've plotted all rebound sequences on top of another (Black line = Feb 24 - March 30, Grey line = June 21 - August 16 and Yellow line = October 02 - today). It is obvious how closely correlated all three sequences are.
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My prediction for the $NDXI think the market is due for a 10-12% rebound in the next 20 to 25 days.
Then, the $NDX will face resistance between 12,200 and 12,500 and will pullback for an 8% to 10% over 8 to 10 days
Then, there will be an important point in the market:
1) Do we go back UP and reverse this bear market OR
2) Crash down another 20%
We will see! Cheers,
NASDAQ This drop is limited. Medium-term targets around 12500.The Nasdaq Index (NDX) has been pulling-back since Tuesday's (Oct 18) Lower High and is once again on its 4H MA50 (blue trend-line). What can be the difference maker here is the RSI on the 1D time-frame which has been trading on Higher Highs/ Higher Lows (Channel Up) since October 03, while the actual price action has been on Lower Highs and Lower Lows (Channel Down). This is a technical Bullish Divergence, often seen on market bottoms (temporary or not).
Since the long-term trend throughout 2022 has been bearish (Bear Cycle), we have to consider this as a temporary bottom at least for now. Such bottoms have been on February 24 and June 16 so far. Interestingly enough, we can see the very same Channel Up on the 1D RSI during those bottoms. Also we can see that their duration with today's is fairly symmetrical. Those bottoms started medium-term rebounds, which broke above the 1D MA50 (red trend-line) and targeted the 1D MA200 (green trend-line), which has marginally hit on the March 29/30 High and approached on the August 16 High.
They trigger to start a bullish break-out has been the 4H MA200 (orange trend-line) and right now Nasdaq is trading below it. If it breaks, the short-term target should be the 1D MA50 and the medium-term the 1D MA200. The projection from where we stand today, puts the 1D MA200 just above 12500 by mid November.
For comparison purposes in order to get a better understanding of Nasdaq's proportionate position compared to the previous rebounds, I've plotted both sequences on today's price action (black and grey lines).
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