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Nothing but Blue Skies Ahead for the Nasdaq 100...Right?

CME_MINI:NQ1!   NASDAQ 100 E-mini Futures
Last night I began to think whether I wanted to be on the long side of this market this very second? It's a fair question for any investor and at this point probably technical traders are asking this question. There is a historically obvious divergence going on in the market. The Nasdaq-100 is currently 3% away from matching its all time high while the S&P 500 is 15%, the Dow Jones Industrial Average is 20% and the Russel 2000 is 28% away from reaching its all time high. Is this the new normal everyone was talking about? Tech sectors outperforming the market by vast margins while the rest of the market lags behind considerably?

Yesterday, I exited my long positions. I am beginning to dislike the set ups that Tesla was providing over the last week. The market is taking too long to follow through to the upside in my opinion. With that said, the Tesla stock remains above the 10 EMA and 20 SMA keeping it at a bullish posture. I'll post on Tesla later today to give a more in depth explanation as to why I exited. For now lets get on with a review of the Nasdaq 100 futures (NQ).

Blue Skies Ahead Right?

The Nasdaq-100 Futures (NQ) just keeps creeping up toward its all time high as if it were a magnet, while other indicies seem content as bottom dwellers. Each chart today will be in the daily time frame. Let's begin!


Above I highlight support and resistance . Clearly a lot more support than resistance above. The only question is whether the all time high can be taken out in one shot. In my view, no. It'll likely take a few attempts. Below is the most bullish scenario, though least likely.


I tend to favor a deeper pull back to support #2 if there were a pull back. If all time highs were tested support #2 would be equivalent to a 38.2% retracement . A normal retracement level for corrective waves. Yes, I said corrective. If you understand Elliott wave you know that corrections can head higher in strong markets. It's the only explanation we can make, while the Dow Jones and S&P continue to lag behind and look like bear markets. I have a scenario in mind and I plan on sharing once we begin to retrace a bit.


Short IT!

Yesterday, I almost FOMO shorted the NQ but came to my senses after looking at the chart below.


Nothing bearish is happening yet! As long as the NQ is supported by the 10 and 25 EMA , the bulls must be respected. We should be keeping an eye for a bearish cross of these two EMAs before entering any short positions as well. More on this when the time comes to initiate shorts! For now, the NQ is too strong and my bias remains the same until the market shows me other wise. Bias: Bullish.

In the meantime, could it be nothing but blue skies ahead for the NQ? Absolutely. But be wary at the all time high retest! I'll be back later on to talk Tesla . Happy trading!

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