𝗘-𝗠𝗶𝗻𝗶 𝗨𝗽𝗱𝗮𝘁𝗲: $ES_F Daily. Top looks to be in3337.50 (261.8% fib) clipped exactly on 1/22/2020. Possible fakeout following FOMC tomorrow with real move starting Friday and / or next week
Nq_f
Elliott Wave View: Nasdaq Short Term SupportElliott Wave view on Nasdaq (NQ_F) suggests the rally from October 3, 2019 low is unfolding as a 5 waves impulse Elliott Wave structure. In the 45 minutes chart below, wave (3) of the impulse structure ended at 8907.25. Pullback in wave (4) ended at 8679.58 as a Flat Elliott Wave structure. Wave A of (4) ended at 8735.25, wave B of (4) bounce ended at 8894.75, and wave C of (4) ended at 8679.58. Nasdaq has resumed higher in wave (5) with internal subdivision as 5 waves of lesser degree.
Up from 8679.58, wave ((i)) ended at 8831 and pullback in wave ((ii)) ended at 8679.58. Wave ((iii)) ended at 9055.5 and wave ((iv)) pullback ended at 8966.25. Index then resumed higher and ended wave ((v)) of 1 at 9114.75. It’s currently within wave 2 pullback to correct cycle from January 8, 2020 low before the rally resumes. We don’t like selling the Index and expect dips to find buyers in the sequence of 3, 7, or 11 swing for further upside as far as pivot at 8679.58 low stays intact. Next potential short term support area is 8949.51 – 9005.91 where the Index can end 7 swing double three correction. From this area, Index can extend to new high or bounce in 3 waves at least.
NQ1!, Buyers: How High One Can Fly...Relentless grind is today's market theme. The market is in a melt up mode. Shorts get run over and only add to the upside move. They are the best buyers after all. One need to understand the current backdrop: massive buyback and QE. All that effort is directed to prevent the last year December fiasco and to make sure that Santa rally is on the way. Until that backdrop is negated pullbacks are buying opportunities.
Use Fib ext from recent upswing to project most immediate targets. It works just fine.
11/28/2019
Happy Thanksgivings!
NQ1!, Short Term Weakness, Indecision, Short Week Ahead For the last several days the market remains in indecision state. The daily 20 MA was tested several times. The buyers continue to defend it. The larger timeframe bullish bias prevails. The short term bias is neutral. That invites both side to trade while creating momentum trades off inflection points with the help of headlines. Fake outs are quite common when the market is in consolidation phase.
The next week is a holiday week. It is expected even less participation and contracted volatility. However, it could change quickly if a headline triggers a turmoil. Best is to watch the inflection points and understand what should cause either a waterfall selloff or a melt up. 8230 level is important - a decisive break and hold below would be a sell signal. A break of the recent balance would set a new all time high.
Last year this time the market was in a sell off mode. I think the Fed does everything in their power to prevent it. They don't need any volatility. Consider that as a backdrop. A short term weakness would be addressed with powerful V-reversals.
11/23/2019
NQ1!, Market At Projected LevelThe market has reached the projected level making a new ATH. One can admire how the market structure and geometry continue to provide a valuable inside ahead of the price movement.
A few things to consider going into the next week:
- The market formed a balance at the current top. Its breakout would suggest a continuation to the next projected level 8350. A breakdown may lead to a retest of the channel bottom.
- The Nasdaq CBOE Volatility Index tagged Mar 15 low with extreme overbought RSI reading.
- The narrowest RTH range.
I'm inclined to see a downside move and spike in volatility.
While visiting a grocery store today I overheard a conversation between two cashiers.
One told another about S&P at all time new high and being very excited. I doubt he was considering a shorting opportunity :) It is said when the last mailman puts his wages into the market the top is defined. We shall see.
Don't predict. Wait for the price action confirmation. If it wants to go higher then there is no reason to fight it. If a sell signal is presented then it is time to sell.
Have a great weekend.
11/15/2019
NQ1!, Market is at an Inflection PointThe sellers made an attempt to break the channel bottom today. With a low volume and lack of participations they failed to follow up. Responsive buyers managed to reverse the entire move and push back into the broken channel. Piled shorts got squeezed. The market is closed at the resistance. Tomorrow is option expiration Friday. It may spike much needed volatility. A break of the resistance would lead to a new all time high. A downside scenario would unfold if the sellers succeed in breaking the bottom of the channel again. Despite a diminishing momentum and negative divergences there is no sell signal. Fake outs are costly for the shorts. Until the table turned around it is less risky to buy pullbacks. Bulls are in control above 8200.
11/14/2019
NQ1!, Marginal New All Time HighThe buyers were active right off the opening and pushed to a new all time high. One can see how the geometry and the structure shown on the chart represent the price action well. An exhausted move to 8300 found some profit takers who managed to push back below the previous ATH. Watching that action I was thinking that it looks like there were no new buyers who decided to buy at high prices. Perhaps the move up was orchestrated to attract the buyers chasing the price and when the volume did not pick up they sold it back. Just a wild thought.
From price action perspective a pull back to the channel bottom should attract buyers for a push back to the channel top. The sentiment would change if the channel gets broken downside decisively.
Active traders can participate in the price action regardless of the direction as long as they understand the inflection points of the structure.
The momentum is not supporting the upside continuation, however, there is no sell signal either.
11/12/2019
NQ1!, The Market Never Drops When Everyone Anticipating ItThe market remains resilient and the bulls are active to defend the recent accomplishment 8200 level. Perhaps reaching and breaching the next 8300 milestone is in their minds.
Jokes aside the price moves up not because there is a strong desire to acquire the product. Put it simple: there is no strong supply met yet. This is e-trading. The volume is low and the momentum is diminishing.
On the chart is the current market structure. Watching the inflection point gives a clue where the price might go next. I found this is an objective view to trade the market and a chance to avoid your personal bias.
Regarding the last session. On Friday, a normal action was interrupted by 2 conflicting headlines. It made the environment challenging but also offered trading opportunities depending on your view and style.
What to expect:
The session ended at 8260 level which is a resistance to watch. A break and hold above it would be in line with the current bullish sentiment. A grinding up action to new highs would be the theme.
A return back to 8200 and hovering in that area would suggest a short term weakness and potential breakdown targeting the next level below. The larger timeframe bias won't change because of that but a spike in volatility is expected.
I mentioned it many times the price action is the only way to gauge which side is winning short term. For example. on Friday the sell side managed to break 8200 level for a very short period of time. Shorts started to pile up and the expectation was to see a sell off. But the price action suggested otherwise and going long at 8200 was a correct play. I tweeted that in real time.
Stay nimble. Trade the market not what you think about it.
11/10/2019
NQ1!, All time Highs, Uninterrupted Buying SpreeThe market continues to exhibit a strong bullish bias. Small pullbacks are bought. Any attempts to start a bigger correction are met by headlines. Nevertheless, one can observe the harmony in those movements and predictability of projected targets. For people who wants to shorts those opportunities are there. The market, through its price action, tells exactly where to do that. Don't initiate a short if the message is not clear. Despite negative divergences, which are only indications of slower momentum, the market can continue its upside journey. The backdrop that fuels that move has not changed.
Stay nimble. Longs are less risky.
Tomorrow is Friday. There is a tendency to mean reversion. 8210-20 is this week point of control. Let's see if the prices ends the week by retesting that level.
11/7/2019
NQ1!, This Market Needs a Reason to SellA grind to a new all time high is a recent theme of this market. Fueled by China news and NFP the market had yet another risk free Friday. One need a patience of a monk to sit through the grind. One of the solutions is "set and forget" while doing something more productive. This market needs a reason to sell. Technicals are important, but not enough . Whoever shorts this market gets squeezed and only adds to the next leg up. One of my projected levels was tagged on Friday. The projected levels are good as targets rather than resistance levels to initiate a short.
There is no doubt that the long side gets overcrowded. The upside reward is questionable as well. Nevertheless, the active traders are in position to capitalize on relatively small swings that are available every day.
My scenarios going forward:
- a pullback to an aggressive support and a bounce to a new all time high
- a pullback to the channel bottom and a bounce with a potential break of the channel
If you are interested in the intraday ideas you can follow me on Twitter. I usually share my thoughts pre-market and intraday when some inflection points are in play.
Stay nimble. The market does not care what we think. Trade the market not the economic outlook.
11/2/2019
NQ1!, The Last Stop Before Open SkyA strong move up has broken the recent balance, outlined on the chart, and came very close to the all time high. This is a momentum move off 2 weeks point of control (7940) that took many shorts by surprise and caused the squeeze forcing them to buy. There are no better buyers than trapped sellers.
At this point we need to watch whether it was one time Friday's deal or this breakout is going to stick. Ideally, the bulls should keep the price up and start moving towards the edge of the projected area which is 100% ext of the most recent balance. The existing all time high is a weak high and it could be taken out easily if the momentum continues. However, if the price starts coming back to the existing balance, 7940 is a big magnet, we may see a false breakout pattern playing which may create a liquidation move targeting 7800 and below depending on the momentum.
Next week the remaining mega tech companies will be reporting, there will be an FOMC announcement, month end - all of those are market moving events. However, there is no need to predict. Watching the inflection points gives some clues where this market could go next.
For now the bulls have priority. Usually, a breakout momentum does not die immediately. The market is in the breakout mode.
Day traders would find opportunities on both sides though.
Stay nimble. Remember that rationality has no meaning for the machines. They are trend following algorithms. If the trend is reversed for whatever reason, they reverse the position and continue to make money. No emotions, no hard feelings.
10/26/2019
NQ1!, Reversal in ProgressRetest of the resistance and failure led to a liquidation move. Breaking the recent wedge added to the downside momentum. Since the move happened off the top of the balance it got exhausted half way to the stronger support. The buyers took advantage of that and pushed back. The market closed at the inflection point. Ideally, we should see a reaction and continuation to the downside to retest Friday's low and potentially reach the support. Watch for a double bottom first.
Whether we see the beginning of a bigger correction or not remains to be seen. Before the mega tech companies are done with the earnings and FOMC meeting announcement it would be low odds to see a big change in the market structure.
A few high level scenarios are outlined on the chart. The market may choose to deliver something in between especially waiting for the outcomes of the above mentioned events.
Day traders would find opportunities on both sides regardless of the scenarios.
10/20/2019
NQ1!, Upside Target is TaggedMultiple headlines triggered the upside rally for today's session. Most of the movement happened in the overnight session. The day session retested the resistance level and found responsive sellers. Could be a risk off going into the weekend. Such a strong move created an overbought condition with a negative divergence. Next week would be telling whether the buyers would like to retest the all time high or would take some time off consolidating between the inflection points.
Several times I mentioned that the bias established within a day session usually remains unchanged. Unless, some news that makes a strong reversal of the sentiment. Keep in mind that the machines are designed to follow the trend. There is no much intellect behind that and definitely no rational regarding the value. Overbought/oversold conditions are warning signs but they don't stop the machines from trend following. Contra trades require precise entries since the risk/reward is limited. If you are not seeing where to enter then better to wait for a pullback and ride the trend. That would be less risky.
Notice the current structure and the steep trend line. This is something to watch. Without a strong break of the trend line a potential scenario is to see a consolidation before a new directional move either upside or downside starts.
10/11/2019
NQ1!, Bulls Want to Close the Week in GreenA wild price action in the overnight session driven by mixed headlines but the RTH session resumed the intended upside move. The market was primed for the upside by forming a balance at the edge of the bigger balance. The breakout happened right off the opening. A strong move into 7780 resistance while being exhausted offered a short opportunity as well.
A lucrative day for both sides.
At this point I would give the bulls a priority as long as they hold the price above 7720. They may try to retest the previous week high.
10/10/2019
NQ1!, Upside Scenario Has Played OutIn my last post I shared an idea to watch the wedge and a positive divergence for a potential upside move off the support. It did play out. Unfortunately, it happened in the overnight session. The day session was slow and uneventful. The FOMC minutes released in the afternoon had a muted reaction. The market spent time holding the overnight gains and drifted up until the resistance level is reached.
At this point we need to see a decisive break of the resistance and a rally to the next level.
Alternative scenarios would be:
- continued balancing below 7620-7720 levels.
- a false breakout leading to a sharp rejection, which is ideal for shorting.
10/9/2019
NQ1!, Broken Support, Back to Old SupportA headline helped to break the previous support, now resistance, and led to a liquidation move back to the old support. There is a positive divergence that may play out . However, it is better to watch on a smaller timeframe a reaction first before engaging on the long side. Watch for headlines. I won't be surprised to see attempts to stop the downfall especially when they price is at inflection points. The timing is impeccable.
One can see that the price is confined within a large range and offers advantage to active traders only.
This type of the market and price action has obvious benefits for traders who are patient and enter the market at major inflection points. This allows to ride the short term trend all day long to the next inflection point.
Short term note: Observe a new wedge that is being formed while having a positive divergence.
10/8/2019
NQ1!, Potential Wedge Breakdown. Today, the price advanced to retest the resistance and the first test attracted responsive sellers. One can see from the chart that negative divergence increased the odds. The price broke the trend line but ended up at the support. At this point we need to see a follow through and break of the support if not then the market is going to enter a consolidation phase between those two inflection points.
10/7/2019
NQ1!, Post NFP RallyPost NFP report created a strong push which set a direction for the Algos from the getgo. After that they just spent the day grinding up. Active traders that observe the price action should be familiar with the Algos behavior. The machines need a kick and direction. That usually news related impulses.
Today's fading was simply risky. But next week could be a different story. One can see from the chart that the market is trying to undo the last week weakness. It is forming a V-reversal indicating that sentiment has changed 180 degree. The momentum indicators are flashing overbought condition though. One need to wait for a sell signal first to confirm that the party is over. Someone will say something, they always do, that would upsets the market and that would be enough to break the very steep trend line. There is not much structure to go around.
Stay nimble. The market offers long and short opportunities during day sessions.
10/4/2019
NQ1!, False Breakdown, Positive Divergence, Trapped ShortsA strong move down driven by a headline with a strong reversal is today's theme. There are a few reasons for a strong bounce (look at a weekly chart) :
- a failed attempt to breach a weekly trend line.
- 50% retracement Fib level
- notable positive divergence
I did not expect a strong reversal, however, on my chart I had 7577 support level and put a limited order to buy ahead.
Both short and long opportunities were available today.
The market is back above the existing support level and most likely would balance and grind to the resistance above. Tomorrow is NFP and end of the week. Anything may happen :) But an expectation is for the market to hold the support.
Stay nimble.
10/3/2019
NQ1!, Double Top Failure, Liquidation MoveAn exhausted move right off the opening into resistance was met by aggressive sellers. The resistance was a confluence of a double top pattern and 20 day moving average. One can see how news are conveniently timed with the market structure. Whether this is a coincidence or not I would leave it to conspiracy theorists. In my case I put a limit order ahead at 7840 and simply played the odds of a potential reaction. A strong sell signal, triggered by the news, put the trend following Algos into reversal. The rest of the day they were selling the rips. This is the beauty of trading with the machines.
The market closed at support with a positive divergence. We may see bottom pickers active in the overnight session. Could be a potential bounce back. Watch 7740 level which is a primary resistance for now. Its break would open the door for a retest of 7780-7800 levels.
10/1/2019
NQ1!, Consolidation at Low Prices, Month End JitteryOn Friday the bulls tried to hold the trend line but eventually lost it. That led to a liquidation move and retest the support below which was taken out thanks too headlines. Price came down to retest low prices where responsive buyers were active. The last push up happened into the closing which may suggests a short covering rally ahead of the weekend. The market closed at the broken support now resistance. There is a slight positive divergence which may play out if the market comes down to retest the lows and forms a double bottom pattern. If the price comes to retest the support below it would be even more attractive for the bulls. Oversold market at the support is a gift.
For now, I expect some consolidation to take place on Monday and perhaps month end chop.
9/28/2019
NQ1!, Beast in a Cage Seeking for ExitA flat day overall with opportunities for both sides. Short off the RTH opening, longs at support back to resistance. The sell side holds the broken balance. Lots of longs are trapped above and every time the price comes to that level they unload loosing positions. Pure market action. Not much to add. Until the supply is excessive the price will be held below. The market looks like a beast confined in the cage where there is no clear exit. That works fine for active traders that takes advantage of the short term moves. However, that keeps big players out of the game.
The market structure remains intact with the same levels.
9/26/2019
NQ1!, There is no Better Buyers as Trapped SellersA potential rally was suggested in the previous post. A fake breakdown of the support followed by a strong reversal. Notice positive divergences on the indicators. The trapped sellers had to cover and flip positions. A breakout of the smaller balance to upside added more fuel to the move. Now, the price is at inflection point while being overbought short term. We may see a potential profit taking in the overnight session or tomorrow. The bearish case is not dismissed. This is a retest of the broken balance.
Enjoy the rides of this wild market. Stay nimble and rely on technicals and market structure.
9/25/2019
