NQ/QQQ Weekend Look (Jan31-Feb4)
Here is the weekend look at the NAS/QQQ going into the trading week of Jan 31 - Feb 4. Last week was a wild one. I had suggested in last week's post that I expected increased volatility going into the Fed meeting and Mega cap earnings but the massive turn around move on Monday Jan 24th was one to remember. The NAS dropped a whopping 700 + points (5%) only to reverse sharply and close up 70 points on the day. I don't have the data, but I believe that made for one of the biggest intraday reversals on record. Volatility continued throughout the week as price moved within a 500+ point range closing out the week with a positive bounce from the lows finishing back where it started on Monday.
I believe the last weeks candle tells the story right now. Indecision. At this point the NAS can either rebound sharply or resume the sell off. There is simply not enough information to make a call. Bulls will say the late week recovery was a positive while the bears are seeing price balancing on a cliff ready to fall off.
Currently price sits below the 200 day MA but above the key 14367 pivot. I would not be surprised to see bullish follow through early this week but my bias will remain bearish until price clears the red neutral box above. There is still massive over head resistance to clear before a renewed up trend can be confirmed. Resistance includes the 9 & 21 emas as well as the 200 sma. If we get an early week bounce look for strong selling pressure to come in at the 14800/15000 level. If price sells off again the recent low of 13706 is key. Below that a move down to 13000 then to 12207 is possible.
We are coming into the heart of earnings season so expect more volatility. The market will get new insights into how companies are dealing with inflation pressures and supply constraints. Non Farm payroll on Friday and CPI data due later this month will keep the market on edge.
I have been posting very few swing charts lately. The reason for this is that under the current conditions trades should be kept small an short. Personally all my trade of late have been short term Futures trades using the levels I provide weekly in these posts. Almost every line on my charts can be used for quick scalps in either direction. If you do not trade futures or the QQQs I recommend focusing on one or two liquid stocks that you are familiar with and use my weekly posts to gauge sentiment and trend.
If you find my posts helpful please give me a thumbs up. I am averaging less than 10 likes a week which is kinda lame. Comments are encouraged as it gives me an idea whether or not followers are finding these posts useful or confusing.
Weekly events...
Monday... Last trading day of January. Chicago PMI
Tuesday... 1st trading day of Feb, US ISM data, JOLTS, OPEC meeting, earning from GOOGL,GM,AMD,PYPL,SBUX,UPS
Wednesday... OIL inventories, ADP employment, earnings from highly followed Dividend stocks + FB
Thursday... Jobless claims, US Factory orders, ISM data, earnings from AMZN, F, BABA, PINS, SNAP, U + Div stocks
Friday... Non Farm payrolls, US unemployment earnings from BMY, GOOS, ETN, REGN, RCL
Bullish notes...
Solid late week recovery above 14367
Positive earnings may become bullish catalyst.
Beginning of Feb inflows possible
Oversold relief rally possible
Negative sentiment can be a contrarian indicator.
Bearish notes...
Price below neutral, 200sma & the 9/21 emas
Market breadth still weak
Data risk from ISM & Non Farm payrolls
Key earnings come in weaker than expected
Russia/Ukraine tensions.
10 year yield potentially breaks 2%
Valuations still still relatively high
Return to Pre Covid trend still not complete.
Comment:
Broke key pivot (red arrow), but now coming into the bottom of the red neutral box. If price break through bottom of red box look for move up to the 200 MA. Still a lot of resistance to push through as trapped long traders will be looking to close positions.
Comment:
NAS is trading above the 200 sma and 21 ema right now but the move happened during the overnight session after GOOGL earnings. Good chance price comes back down to fill the overnight gap. Cash session will be key. Price needs to retest the 200 and go back up for the bull move to continue.
Comment:
Price been chopping all over the place. It failed to hold the 200 SMA and is has now given back the overnight gains after the AMZN earnings. Pressure is coming from the strong payroll numbers which has spiked the 10 year yield. Looks like it may re test recent lows today. Best to watch price after the cash open before picking a direction.
Comment:
I don't say this to brag only to help people. Notice how price reacts to every line that I put on the chart. Other than the moving averages these lines have not changed since my post on Sunday. Learn these levels and you will have an edge.
