NAS - Top building, with first leg down. Sell on tops!
We had the first leg down yesterday. Was it a big drop? It might have seemed so, but in fact it was nothing. Just like SP500, Nas100 is still kept in a range, and actually trying to move higher from range bottom. We have very important signals on all time frames which suggest this mkt is likely becoming a sell on tops.
First of all the most important Key Support level is 3845. It is the previus bottom on 4 Hrs and is in line with Daily Kijun Sen.
Daily: Ichimoku Setup is still fine, until Price breaks below Kijun Sen (3845 key support). Chikou Span still have some open space ahead. But volatility started to increase in this index, and all other indicators that I use show this mkt is very quickly loosing bullish momentum. In fact there is some negative divergence between these indicator and price action. DMI crossed bearish with ADX still above 20. Slow Stoch again on sell, MACD sell and decreasing. We still have this minor trend up, which sooner or later can be penetrated on a next selling wave.
4 Hrs: Weak Tenkan/Kijun sell signal above Kumo. Price dipped down to Kumo support, which for now held. Chikou Span is below Price candles but still in the cloud. The current and the future Kumo is very thin, and flat, not pointing up or down. DMI is bearish with increasing ADX, Slow Stoch gave short term buy signal due to last few candle prints.
All in this time frame looks still sideaway but with increasing bearish bias. Just like I wrote yesterday on SP500, it is tricky to trade based on Ichimoku signals until Price hits below 3845. Sell on range top side with using short term Slow Stoch oscillator sell signals is a better strategy now.
1 Hr: Bearish and will be a sell on tops until it trades below 3930. I marked the short strategy on this chart this time. Since Tenkan and Senkou B point up a bit, we may see some push up again today before the next possible sell wave. I will try to add to my shorts in 3890 - 3905 range. If we miss that, than I will sell the 3845 Key level break and all spikes and retests thereafter.
All in all this counter short trade has more and more chance to work well, and if once it accelerates it will be a quick profit and a decent risk reward. First target as you see is ard 3730-3750.
I think US mkts are way too confident and really underestimate global risks which we have all around. Look at European equities, how heavily been hit. Then look at US equities which are way too overbought, most of indexes are ard all time highs, with lots of negative divergences on their charts, but still mkt denies any possibility of a correction. Depth indicators are worrysome too (but thats another story). I think we are in a serious top building phase, and the later it happens, the bigger the negative surprize will be.
One more thing: check what VIX has done yesterday just only on the back of this really minor down day! What will happen to it when mkts correct 5-7 % more?
First of all the most important Key Support level is 3845. It is the previus bottom on 4 Hrs and is in line with Daily Kijun Sen.
Daily: Ichimoku Setup is still fine, until Price breaks below Kijun Sen (3845 key support). Chikou Span still have some open space ahead. But volatility started to increase in this index, and all other indicators that I use show this mkt is very quickly loosing bullish momentum. In fact there is some negative divergence between these indicator and price action. DMI crossed bearish with ADX still above 20. Slow Stoch again on sell, MACD sell and decreasing. We still have this minor trend up, which sooner or later can be penetrated on a next selling wave.
4 Hrs: Weak Tenkan/Kijun sell signal above Kumo. Price dipped down to Kumo support, which for now held. Chikou Span is below Price candles but still in the cloud. The current and the future Kumo is very thin, and flat, not pointing up or down. DMI is bearish with increasing ADX, Slow Stoch gave short term buy signal due to last few candle prints.
All in this time frame looks still sideaway but with increasing bearish bias. Just like I wrote yesterday on SP500, it is tricky to trade based on Ichimoku signals until Price hits below 3845. Sell on range top side with using short term Slow Stoch oscillator sell signals is a better strategy now.
1 Hr: Bearish and will be a sell on tops until it trades below 3930. I marked the short strategy on this chart this time. Since Tenkan and Senkou B point up a bit, we may see some push up again today before the next possible sell wave. I will try to add to my shorts in 3890 - 3905 range. If we miss that, than I will sell the 3845 Key level break and all spikes and retests thereafter.
All in all this counter short trade has more and more chance to work well, and if once it accelerates it will be a quick profit and a decent risk reward. First target as you see is ard 3730-3750.
I think US mkts are way too confident and really underestimate global risks which we have all around. Look at European equities, how heavily been hit. Then look at US equities which are way too overbought, most of indexes are ard all time highs, with lots of negative divergences on their charts, but still mkt denies any possibility of a correction. Depth indicators are worrysome too (but thats another story). I think we are in a serious top building phase, and the later it happens, the bigger the negative surprize will be.
One more thing: check what VIX has done yesterday just only on the back of this really minor down day! What will happen to it when mkts correct 5-7 % more?
