NQ at the daily view.
The NQ experienced a technical pullback. Despite what news say, the NQ was primed for a pullback. NQ was at a key resistance zone in its current channel. The VXN was at both trend line and RSI support. Furthermore, the NAAD reached a trend line resistance as well. People who rely on the news for the trading either haven't done their due diligence in technical analysis... or were just plainly lazy to do so.
There is a lot going on in the NQ below. The NQ is not even halfway down its current channel. The green lines should be where we find some major support. The yellow dotted line is the old "redemption line" from its old upward channel. The pink line is the top of the NQ's old channel back from 2016. Basically, there are a lot of trend lines below that would make it very hard for the NQ to break below. The bearish case is that we still have some room to go below and it's election season. The VXN has yet to break trend line support. The NAAD has yet to break its trend line resistance. The VXN is projecting a volatility jump around mid-October.
However, the bullish case is getting stronger by the day. The NAAD made a couple of higher lows and might break its trend line resistance this week. Liquidity levels have turned around and started increasing. Corporate credit is definitely stabilizing. I'm seeing increased strength in the market internals. It's possible that the NQ is forming an inverse head and shoulders pattern, but we have to wait to see the right shoulder forming.
All this bullish and bearish evidence is telling me that we have entered into election seasons volatility. The downtrends and uptrends will most likely be short lived. Market internals are not bearish enough to support a crash, but not bullish enough to have a good uptrend... yet. Furthermore, there are several supports below that would prevent it from actually crashing. I'm just going to buy the dips and exit longs when the VXN is about to reach support.
Shorting has always been the riskier side of trading anyways. You're basically going again 100 years of processes that are designed to prevent a crash - unless it's a black swan event. Furthermore, downtrends are shorter lived than uptrends. By the time you realize it's a downtrend, it's already almost over. You can catch near the beginning of uptrends since they take longer to lift off. Trading is already hard. Why make it harder on yourself?
The NQ experienced a technical pullback. Despite what news say, the NQ was primed for a pullback. NQ was at a key resistance zone in its current channel. The VXN was at both trend line and RSI support. Furthermore, the NAAD reached a trend line resistance as well. People who rely on the news for the trading either haven't done their due diligence in technical analysis... or were just plainly lazy to do so.
There is a lot going on in the NQ below. The NQ is not even halfway down its current channel. The green lines should be where we find some major support. The yellow dotted line is the old "redemption line" from its old upward channel. The pink line is the top of the NQ's old channel back from 2016. Basically, there are a lot of trend lines below that would make it very hard for the NQ to break below. The bearish case is that we still have some room to go below and it's election season. The VXN has yet to break trend line support. The NAAD has yet to break its trend line resistance. The VXN is projecting a volatility jump around mid-October.
However, the bullish case is getting stronger by the day. The NAAD made a couple of higher lows and might break its trend line resistance this week. Liquidity levels have turned around and started increasing. Corporate credit is definitely stabilizing. I'm seeing increased strength in the market internals. It's possible that the NQ is forming an inverse head and shoulders pattern, but we have to wait to see the right shoulder forming.
All this bullish and bearish evidence is telling me that we have entered into election seasons volatility. The downtrends and uptrends will most likely be short lived. Market internals are not bearish enough to support a crash, but not bullish enough to have a good uptrend... yet. Furthermore, there are several supports below that would prevent it from actually crashing. I'm just going to buy the dips and exit longs when the VXN is about to reach support.
Shorting has always been the riskier side of trading anyways. You're basically going again 100 years of processes that are designed to prevent a crash - unless it's a black swan event. Furthermore, downtrends are shorter lived than uptrends. By the time you realize it's a downtrend, it's already almost over. You can catch near the beginning of uptrends since they take longer to lift off. Trading is already hard. Why make it harder on yourself?