Nasdaq 100 - Nasdaq futures at the crossroads

Nasdaq's continuous futures continue to march higher and show resilience as market participants continue to buy dips at any potential selloff. Momentarily, we will pay close attention to the immediate resistance and support levels. Weakness to penetrate above the resistance would imply the rally might turn to a halt. This is also implied by declining ADX. Therefore, we are cautious and look at two possible scenarios. One would involve NQ1! to break up and continue to 16 009.25 USD. The other scenario would involve NQ1! halting a rally and reversing down to 14 668.50 USD (and potentially going lower or creating a neutral zone between this price level and 15 268.75 USD). However, at the moment, we remain relatively bullish.

Illustration 1.01

The picture above shows NQ1! for the past two years. Additionally, it shows two simple moving averages, 20-day SMA (blue) and 50-day SMA (red). Recently, the bullish crossover took place between these two averages. Although, it needs to be noted that moving averages are lagging indicators. Therefore, we will seek further confirmation also elsewhere.

Technical analysis - daily time frame
RSI and Stochastic are neutral. Meanwhile, MACD remains bullish. DM+ and DM- also point to bullish conditions in the market. ADX continues to show that the prior bearish trend is even further weakening. Additionally, volume remains sustainable for the rally. Overall, the daily time frame is bullish. However, there is a sign of exhaustion in RSI. Therefore we will pay close attention to support/resistance levels and the ability of the price to move through them.

Illustration 1.02

Illustration 1.02 shows RSI on the daily time frame. Support and resistance levels for RSI are indicated by white dashed lines. A breakout upwards would be bullish; on the other hand, a breakout below the support would be bearish.

Technical analysis - weekly time frame
RSI and Stochastic are bullish. MACD is neutral; though it continues to move towards a bullish crossover. DM+ and DM- are bearish but, at the same time, ADX sharply declines. Overall, the weekly time frame sees bullish developments.

Illustration 1.03

The image above shows particular support and resistance levels.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.

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Yesterday, NQ1! failed to move above the immediate resistance, and a breakdown ensued. Nasdaq continuous futures fell as low as 14 374.75 USD. This is particularly troubling for the index and suggests investors are incredibly nervous and unsure where the market is headed next.