NQ/QQQ Weekly Levels (Jan 3-6)

The Nasdaq ended the last week of 2022 with a 0.43% decline and remained weak. It finished the year 430 points above it’s 52-week low, near the bottom of the bearish channel. The price has been fluctuating around the June 16th low, which will be my key line for determining bullish or bearish action in the future. This week, I added a long-term trend line drawn from the 2009 low, which could act as a price magnet in 2023. Many market participants are bearish and are waiting for a panic sell-off before a new uptrend can resume. There is a possibility of a drop towards the long-term trend line and perhaps the 2020 peak, or an early year reversal. The downward price movement has slowed, and the NQ has formed another h-pattern, which often leads to a sudden, unexpected bullish reversal. The key levels to watch are the December 12th high above the June 16th low and the October 13th low below it. Happy New Year.

• Down .43 % last week, down 34% for the year & 430 pts off 52 week low
• New trading year begins Tuesday
• Bias remains bearish with price below 9/21/55 emas & below Jun 16th low
• H-Pattern in play
• 2020 Peak within striking distance
• Focus is on 3 key pivots. Oct 13th low, June 16th low & Dec 12th high
• Long term trend line in play
• Jan historically weak/Flat month for NQ. Closing an average of +0.40% over past 20years.
• Current market narrative = recession
• FOMC Minutes due out Wed & NFP due out Friday

WEEKLY EVENTS

Monday Market Closed
Tuesday US S&P Manufacturing
Wednesday US ISM Manufacturing, US JOLTS & FOMC Minutes
Thursday US International Trade, US Initial Jobless Claims, Services PMI & EIA Crude Inventories
Friday US Unemployment Rate, US Average Earnings & Non Farm Payrolls

NOTABLE EARNINGS

Monday Market closed
Tuesday BHP
Wednesday Nothing notable
Thursday LW, NTDOY, STZ, WBA
Friday Nothing notable

BULLISH NOTES

New year/month = Potential inflows
h-pattern = reversal potential
Oversold conditions
Low VIX
Potential positive reaction to FOMC Minutes & NFP
Dropping DXY
Potential reversal in bond yields
Earning season starts mid Jan

BEARISH NOTES

Price below 9/21/55 ema
Price below June 16th low
Recession fears
Market participants expect at least one more big drop
Potential negative reaction to FOMC minutes & NFP
Long term trendline magnet
Expectation that all 2020 gains will be reversed.

Comment:

Starting the NY by gapping up into the bottom of last week's channel and rejecting lower. Price has now filled the weekend gap. Plan remains the same. Bullish price action expected above the Jun16Low and bearish below. The bottom of the channel also lines up with the Jun16low.

Comment:

NQ continues to work its way lower. Hanging by a thread this morning above the trend line a break could take it down to the Oct 13th low. Below that I would expect some panic selling. A hold of the trend line would take us back up into the recent range.