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NASDAQ hits the other type of bump!You could be well forgiven if you thought that the market was toying with you... in the last three weeks, we saw the NASDAQ follow through downside strongly, then ricochet off a support strongly, only to be yet again totally overwhelmed by the bears mauling the markets. In these volatile times, one need to be nimble, and this had been recently heads up in my earlier analyses. Having said all that, something interesting appears to have presented itself, particularly in the NASDAQ futures, NQ1!, and I do wonder how many had actually noticed this enigma. It will be discussed here, and we have to play the bull bear scenarios yet again; expected as the volatility is high and sudden changes can and will happen. We start with the NQ1! NASDAQ futures daily chart. We see that the week started as expected with a nice gap up follow through from last week Friday, above the 55EMA. Then with a Powell Pow-Wow, one single day engulfed and wiped out 3 days worth of gains, closing two gap ups. Extremely bearish by any standards. The following day was a weak technical rebound, and then a second bearish engulfing type of price action. On Friday, it gapped down, and made a lower low. Only respite is a late session recovery to close the day as a very interesting candlestick known as the Dragonfly Doji . This doji represents a likely bounce, and is a pre-cursor to a possible bottom, or at least a consolidation. The MACD is starting to show a bullish divergence, and it is starting to appear that a bottom may be forming. But till then, the MACD (lagging as it is) is suggesting that there is more downside or a consolidation at best. Hence, we can draw a critical support line ( the thick yellow line) where price action should remain, and close above for a bullish or consolidation range; otherwise, a breakdown to the previous downside targets is more likely. Without doubt, the daily chart appears to be more bearish than bullish, but the weekly chart has much more than meets the eye. Over the last three weeks, the NQ1! NASDAQ futures weekly candle range is clearly increasing, and appears erratic with a down up down pattern. Zooming out, the symmetrical pattern projection suggest that the NASDAQ is due for a further slide down to below 10K. The technical indicators are divergent in the sense that the MACD is bearish, and yet the shorter term RPM is suggesting some bullishness. How now brown cow? Perhaps if we also take the candlestick patterns to the next level, we might get a clearer hint. The three recent weekly candles circled represent a group of three candlesticks called a Stick Sandwich . In this set of candlestick pattern, regardless of how it looks (bearish) it is typically a bullish reversal pattern at the bottom of a downtrend. Now, to take the bullish scenario, it is nearing the end of a pattern, and the downtrend has been going on for a bit (since Nov 2021 high); so if this is a bullish reversal, then it might be a higher low on the weekly chart. In order for this to pan out, it needs to recover quite strongly over the next couple of weeks, and we can set the resistance at about 13K (thick green line). Overall, this gives us a rather large range from 11,900 to 12,900, and time is needed to see what/where the market decides. Non-technical factors adding to volatility include FOMC announcement on 21 September. Am not an expert about that, but all I can comment is that volatility both ways is a given. Hence, the range guidance. Still, keep in mind the initial and base projection down to 9500, it is not invalidated yet. IMHPO, the I think the bears have a 70/30 edge; am just ready to be nimble (particularly in mindset, perception and timeframe), as the charts are telling. I really hope you enjoyed and appreciate my rather unique analysis. Admittedly, there are parts not mentioned, but do contribute to the overall situational critical analysis. I do not mention as I am not an expert (yet) in those areas although some factors are considered in the overall analysis. More importantly, there are links for further background reading, so do click on them and enjoy the read. Looking forward to your comments... Stay safe & well, be nimble. Have a great week ahead!
CME_MINI:NQ1!
by Auguraltrader
NASDAQ continues tumble towards targetJust a quick review on the week after Powell's Pow Wow speech that sent markets off a cliff... The weekly NASDAQ futures chart had a rather uncommon gap down that failed a close attempt. The week closed down near the lows as well. MACD turned down and is about to cross under the MACD Signal, and well as into the bear territory. All these happening after a failure of the 55EMA three weeks ago. Taken together, it is not looking good at all, and the technical structure warns badly for the next 7 to 8 weeks. A target area of 11-11.5K is expected, but with such initial momentum, it appears that the NASDAQ is more likely to dip below 10K level within the next 8 weeks. This is observable only form the weekly chart itself! Turning to the daily chart, we can see that the last week had bulls struggling with an early but futile attempt to close the gap. This created top tails by mid-week which indicated more downside probability (as expected), and despite a rally on some good data later in the week, the bearishness overwhelmed into closing on Friday. The technical indicator RPM is showing a strong momentum, and the MACD signal is already in bearish territory. 11750 appears as an immediate support, which is not likely to hold out long, but is likely to offer a breather of the bear charge next week. The gap range formed in the week's opening is now a resistance zone. Overall, there is a strong bearish background, but the week incoming should offer a pause, and some sort of a muted technical bounce. Thus far, the modelling targets the NASDAQ below 10K. Until there is a clear break of this model projection, which might take at least a month to form, the NASDAQ is following the projection; heads up.
CME_MINI:NQ1!
by Auguraltrader
NASDAQ - Powell Pow WowLast words from the last analysis were: " be cautious as volatility will spike! " And Powelll delivered a strong stance which blew volatility to a monthly high, up 17% for the VIX. The weekly NASDAQ chart completed the bearish candlestick pattern on a 55EMA failure, and sliced through the 13K support. This is totally not bullish for the next couple of weeks. Downside targets now appear the last low (in October) or a more ominous symmetry projection farther down at 9.5K. The weekly technical indicators currently do not suggest enough bearish power to reach there (yet) and 11.5K higher low appears plausible at the moment. Thing is... next month's Fed meet will firmly provide enough volatility for the next few weeks. The NASDAQ daily chart demonstrates how a reality statement could drive home a message. It can in the form of a Bearish Engulfing, that broke down the 13K support and 55EMA, forming a lower high. Bearish technical indicators have been suggesting this for the past week or two, so should not be much surprise here. Both daily and weekly charts are aligned in bearish tones (as expected earlier), so perhaps an early week technical bounce, and then later week, or the week after, push down is likely...
CME_MINI:NQ1!Short
by Auguraltrader
SPY Weekly review and forecast: August 22, 2022Last week brought the first sell side activity the markets have seen in nearly 6 weeks. The market digested comments within the FED minutes as being dovish, and was on track to extend the rally through most of the week. The tone changed on Thursday and Friday and the market was unable to hold the 4300 level. Most of the selling was precipitated by technology and the financials, while energy finished positive on the week. Volatility has also begun to expand as the VIX finished positive on the week. The weekly expected move in the SPY is also greater than last week's by almost a full point. SKEW closed flat-to-down week over week, but is still in an uptrend. SPY -1.16% (+/- 8.3) QQQ -2.28% (+/- 8.89) IWM -2.85 (+/- 4.97) ____________________ Technology -2.5% (+/- 4.09) Energy +1.26 (+/- 1.26) Financials -1.69% (+/- 0.83) ____________________ VIX: +12.19% (23.07; ~50% IV Percentile) _____________________ The rally we've seen since June has been impressive, so a pull back was going to come eventually. Its important to zoom out and look at the big picture perspective. The market may have re-entered the sideways channel I outlined at the beginning of the month. I'm looking for this week to have a mildly bearish bias, but most probably staying within the expected move in advance of the FED's Jackson Hole meeting (so think between 4150 - 4300 in SPX). I'm going to be keeping a close eye on the Bonds as well as Energy. If the Bonds continue to fall, it will be more fuel on the inflation fire. With regards to energy, stocks like XOM are at key inflection points on their Volume Profiles; selling in energy now would weigh heavily on the indices.
AMEX:SPY
by InnerMotionTrading
NASDAQ retracement ONThe NASDAQ over-extended its upside target and the later part of last week stalled and started to retrace. Nothing exciting here as it was expected for weeks. lol So the NASDAQ Futures Weekly chart how a (breakout) failure of the 55EMA, and somewhat of a bearish reversal top candlestick pattern in the likes of a Dark Cloud Cover of sorts, or two-thirds of a Three Inside Down. Both suggest that the upcoming week would more likely be a down week. Notably, this past week completes the patterns symmetry of the NASDAQ fall magnitudes, as mentioned in previous earlier post. The Daily chart shows the completed trend reversal pattern (wave 1-5) of a series of higher lows and higher highs. And now, a retracement is in order, in a somewhat expected fashion. MACD and RPM both clearly indicate the retracement. This drawback should be looking for the 13K (or rather 12,900) support. A weaker market is more likely to bring it down to 12,000 or lower instead... perhaps later in September. I am in two minds at this point and here is why... The Daily chart appears to have turned around the trend into a bullish recovery. BUT, the weekly chart is in need of a higher low, which may have a 2000 point range at least. The two things that bugs me bad is the failure of the weekly 55EMA, and the distance from breaking above 14,400 for a weekly bullish clearance. Overall, the weekly chart is not ready (yet) to launch the next bull trend despite having pretty decent technical indicators. Stay safe and well... be cautious as volatility will spike!
CME_MINI:NQ1!Short
by Auguraltrader
3
SPY Weekly review and Forecast: August 8th, 2022This week's action was largely defined by two dynamics: Employment data, and sector rotation. After initially selling off on Friday after the Employment data drop, the market reversed course and rallied much of the day before ultimately finishing slightly down on the session. Despite trade being predominantly sideways in an 80 point range, the market extended it's rally and finished up on the week. The range was the result of the aforementioned sector rotation. Tech moved into the leadership role as Eneregy, which had been leading the rally, sold off considerably. Stuck in the middle were the financials. Before looking ahead, here's a snapshot of last weeks numbers, and expected moves for the upcoming week: SPY +1% (+/- 8.81) QQQ +2.6% (+/- 9.33) IWM +2.7% (+/- 4.96) ____________________ Technology +2.8% Energy -5.1% Financials +0.8% ____________________ VIX: -0.84% (21.14; ~25% IV Percentile) ____________________ Heading into next week, the market is maintaining a fairly resilient - if not strong posture. There will be a smattering of earnings from small/midsized companies throughout the week, and a potential market moving event with CPI data being released on Wednseday. A natural question to ask is when volatility will find a bottom and make a return. Nevertheless, the market looks posied to finish Q3 strong. I've updated the SPY chart to include an intermediate upside target of 425, which is very much in play heading into September. There is reason to be cautious however, as SKEW is potentially throwing out warning signs as it finished the week with its highest print in nearly 3 months.
AMEX:SPYLong
by InnerMotionTrading
NASDAQ near upside targetThe NASDAQ just about reached the weekly 55EMA and retraced slightly . It cleared the 13K resistance and 13.2K resistance as well. Still bullish in the weekly technical indicators. The daily chart breaks down the week, with a early week pull back and some volatility and a weak retest of the gap; and then the mid-week bullish spike to break 13K. These were expected last weekend in the previous post. Similarly, the technical indicators were waning in acceleration and this is observed again in the last week. What makes it a little uncomfortable is the Friday candle... one that is suggesting indecision. So, I would start being cautious really. Reading two things now: a pop up spike to about 13,500, and then some retracement should set in.
CME_MINI:NQ1!
by Auguraltrader
SPX Weekly review and forecast: August 1, 2022Last week, the markets saw a strong move to the upside with the SPX closing just shy of 4150 (4133). The move was largely fueled by FED chair Jerome Powell's comments, as well as strong earnings out of mega market cap stocks such as AAPL and AMZN. AMZN rallied +17.5% on the week and is up a whopping +32% from its low on June 13th. A similar story for AAPL, which is up +8.3% WoW and +25% since June 13. Joining the party, energy stocks like XOM reported very strong profits which vaulted the XLE higher. So far, the primary thesis of a bullish continuation being powered by energy (XLE) and technology (XLK) has come to fruition. The question, of course, is how long it will last - but first, a snapshot of last week's action: SPX: +5.2% Nasdaq: +6.8% Russell: +4.5% __________________ Technology (XLK): +7.5% Energy (XLE): +9% Financials (XLF): +3.9% Looking ahead to next week, the SPX is poised to retest the price zone between 4100 - 4200 which proved to be considerable resistance back on early June. The probabilities suggest some range bound action here, before the next major move. Needless to say, there's a chance that we could see a forceful continuation, and an even smaller chance of an outright rejection. Regardless, given the improving conditions, 4300 and 4400 are very much in play as potential upside targets heading into Q4. The expected moves for this week are +/- 81.30 (SPX), 8.81 (QQQ), 4.8 (IWM). The Nasdaq is clearly in the pole position for this rally, and is threatening to push back to 14,000, but with another busy week of earnings, as well as unemployment numbers, and more inflation data, there is still plenty of fuel to spark volatility (which has fallen off a cliff). Best of luck this week. If you found this helpful, please let me know!
FX:SPX500Long
by InnerMotionTrading
NASDAQ Bullish firm; to test 13KAs heads up weeks ago, now it is clear that the consequent market action is bullish. The weekly chart clearly showed the consolidation in June, and the robust breakout in July, with a strong bullish looking candle (nice lower tail and close very near at the top) to end the week. Technical indicators are aligned with momentum. 13K resistance should be tested, and appears likely to break. The daily chart has a lot more detail, and takeaways too... Last weekend, it was expected that " an early to mid week retracement, and then a possible uptick. " Not only was it perfect, the uptick was exceeded! Firstly, the mid-week move was a bit of an unusual response to the FOMC raising rates by 75bp. Then the momentum followed through, and the week ended with a significant gap up - Gap & run style, stopping just at the 13K resistance. Thursday's move completed the trend reversal pattern of a series of Higher High (HH) and Higher Lows (HL) denoted by the yellow lines through point 1 to point 5. Upon breaking above the high at point 3, that was pretty much the completion of the trend reversal. Now, clearly bullish and all, we do not go in all guns blazing, and here is why: There is a clear and immediate 13K resistance, and the weekend brings a possibility of a Monday retest of the gap. Although expected that the retracements should be shallow, the daily RPM is indicating a very much reduced rate of acceleration. Small signs like these are like cracks in the wall. Oh, btw... Have you seen the Monthly chart? It is so beautifully crafted with a huge Marubozu type candle engulfing a significantly large bearish June candle. This suggests three things: 1. Next couple of (2, maybe if we lucky 3) months are likely to be bullish; 2. The bear trend is broken; and 3. More importantly, the range of the (last 2) monthly candles suggest a significant range of volatility ahead And so, towards the upside target we go!
CME_MINI:NQ1!Long
by Auguraltrader
8
NASDAQ Ka-Boing!Ok, so we got the NASDAQ bounce for the week as outlined in the previous post. How now, brown cow? The weekly chart now has bullish crossovers in the technical indicators, and clearly a breakout of the consolidation range between 11,200 to 12,200. Mildly and cautiously bullish for the weekly chart, The daily chart shows that the week ended lower after clocking an intraday high that is also the week's high. The candlestick is actually bearish, and the daily technicals appear a bit winded. This collectively may result in an early to mid week retracement, and then a possible uptick. Note that the FOMC meeting is on 26-27 July, so aligned that the early week would be jittery and later in the week sees a stronger move. Either way, be like water, my friends...
CME_MINI:NQ1!
by Auguraltrader
Looking ahead to next week in the S&P (July 25th, 2022)With things like housing statistics, employment data, and earnings from heavyweights such as GOOG, MSFT, and 3M, next week looks to be filled with potential market moving events. Most notably however is FED Chair Jerome Powell's press conference on Wednesday afternoon. While its no secret that we're headed into a world of higher interest rates, FED speak always has a tendency to move markets one way or another - but before we look ahead, here is a quick snapshot of last weeks action: S&P500: +2.3% Nasdaq: +3.3% Russell: +3.3% ------------------- Technology (XLK): +6.5% Energy (XLE): +4.5% Financials (XLF): +2.3% Heading into next week, SPY is looking at an expected move of +/- 9.8 on 24%IV ... (QQQ +/- 10.3, 32%IV; IWM +/- 5.6, 30%IV). SPY appears to be gaining steam on the shorter time frames (4HR, etc.), and I think the sectors driving the rally have more room to run, so my primary idea is for the rally to continue over the intermediate term. There may be some turbulence along the way, so perhaps a retest of the top of the previous range around 390 before ultimately heading toward 415. However, don't ignore the bonds. They have seen a solid rally off their lows in June. If momentum can continue, bond prices could accelerate up to 149"00, which would almost certainly lead to weakness in equities. Please note: these are not predictions - they are just my ideas about how I'm seeing the markets and are to help me formulate my own trades. If you find this helpful, please consider liking, commenting, following, boosting, baking cookies, setting me up with your single friends, blah blah blah blah...
AMEX:SPYLong
by InnerMotionTrading
3
NASDAQ about ready to breakoutAn interesting week went by, one with ups and downs and all around. The week ended with a long lower tail in the weekly candlestick. This we know, indicates bullishness. The daily chart shows how this came about, with a doji on Wednesday, and then a higher low retest followed by a nice uptick on Friday. These moves bounced off a support level, as well as clock in a second higher low (after technical bounce was expected previously). The weekly technical indicators crossed up recently, and the daily technical indicators show mild bullish build in the MACD, and less so in the RPM. Taken together, it appears that a bullish break out is imminent for the coming week. If this happens, then we are looking at a higher probability for July to close higher at about 13,500. Watch the next few days, it should show hand...
CME_MINI:NQ1!
by Auguraltrader
6
NASDAQ technical bounce as expectedPreviously, with a hit on target, a technical bounce was expected, and the end of last week... it happened! The NASDAQ weekly is leading the charge with an overwhelming bullish candle for the week. MACD histograms are thinning out and weekly MACD are about to cross over. Using the simple arrows, projections bring the NASDAQ to 13,600 where it should meet the weekly 55EMA. The daily chart shows a clear break out to the HULL moving average, and has MACD crossed over already. The week ended with a bullish marubozu. Bullish clearly...
CME_MINI:NQ1!Long
by Auguraltrader