Guess Who's Back? NQ 10/5/2020
NQ at the daily view.
So the NQ close back into its old upward channel again which I call "Big Daddy Sunshine." Because I ran out of goofy names in my head.
Liquidity levels made a strong comeback last week and now we are seeing higher lows. An IHS pattern is forming - albeit a messy right shoulder.
That doesn't mean we won't get pullbacks along the way. Shorting is already the riskier side of trading. Now, it's even riskier than before. We can have pullbacks along the way. But the trend line or major supports below are basically the Spartans from "300."
The NAAD decisively broke its trend line resistance which is a bullish divergence. Multiple risk-on assets and liquidity charts are showing uptrend now. I'll put it this way. I have extreme doubts that the NQ will close the day below 10700 for the next week or two. If the NQ does touch around that area, I'm going big long there.
Why did the NQ rally today? Too many amateur traders who were chasing the news. Think about it.
When the President contracted COVID, that was every permabear's dream come true. Unfortunately, most permabulls and permabears tend to ignore what the charts and internal market data say. So, permabears were shorting into the weekend with the same exact thought since March. "There's bound to be bad news over the weekend." Today, we definitely saw some shorts panicking and covering. That's what happens when you chase the news.
A smarter play was in biotech. XBI and LABU were already forming an inverse head and shoulders pattern. They were ready to rally anyways from a technical view. When the President was rumored to be discharged from the hospital this morning, biotech had an excuse to play out that bottoming pattern. LABU rallied over 15% today. 9% was from intraday and not overnight.
So the NQ close back into its old upward channel again which I call "Big Daddy Sunshine." Because I ran out of goofy names in my head.
Liquidity levels made a strong comeback last week and now we are seeing higher lows. An IHS pattern is forming - albeit a messy right shoulder.
That doesn't mean we won't get pullbacks along the way. Shorting is already the riskier side of trading. Now, it's even riskier than before. We can have pullbacks along the way. But the trend line or major supports below are basically the Spartans from "300."
The NAAD decisively broke its trend line resistance which is a bullish divergence. Multiple risk-on assets and liquidity charts are showing uptrend now. I'll put it this way. I have extreme doubts that the NQ will close the day below 10700 for the next week or two. If the NQ does touch around that area, I'm going big long there.
Why did the NQ rally today? Too many amateur traders who were chasing the news. Think about it.
When the President contracted COVID, that was every permabear's dream come true. Unfortunately, most permabulls and permabears tend to ignore what the charts and internal market data say. So, permabears were shorting into the weekend with the same exact thought since March. "There's bound to be bad news over the weekend." Today, we definitely saw some shorts panicking and covering. That's what happens when you chase the news.
A smarter play was in biotech. XBI and LABU were already forming an inverse head and shoulders pattern. They were ready to rally anyways from a technical view. When the President was rumored to be discharged from the hospital this morning, biotech had an excuse to play out that bottoming pattern. LABU rallied over 15% today. 9% was from intraday and not overnight.
Comment:
NQ pulled back on time. The VXN bounced off of trend line support. I think the right shoulder is starting to form.