A new high in QQQ, no new high in NQ1!, and skepticism
Yesterday, prices rose across the board, with Nasdaq 100 index rising almost 5%. This move came amid a dovish interpretation of Jerome Powell’s speech by the market. As a result, the abrupt price action invalidated our assumptions about the potential top of the bear market rally.
Illustration 1.01
The daily chart of QQQ is displayed above. The yellow arrow indicates the invalidation of our early assumptions about the potential top for the bear market rally.
However, Nasdaq 100 continuous futures (NQ1!) failed to break above the immediate support/resistance and did not constitute a new high. That makes us skeptical about the new high in QQQ. Therefore, to entirely invalidate our earlier assumptions, we would like to see invalidation also in NQ1!.
Illustration 1.02
Illustration 1.02 shows the daily chart of NQ1!. The yellow arrow shows no invalidation in NQ1!.
At the moment, we will wait and see. If NQ1! breaks to the upside and holds above the immediate support/resistance, it will bolster the case for rally continuation. As a result, it will force us to abandon our price target of 270$.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Illustration 1.01
However, Nasdaq 100 continuous futures (NQ1!) failed to break above the immediate support/resistance and did not constitute a new high. That makes us skeptical about the new high in QQQ. Therefore, to entirely invalidate our earlier assumptions, we would like to see invalidation also in NQ1!.
Illustration 1.02
At the moment, we will wait and see. If NQ1! breaks to the upside and holds above the immediate support/resistance, it will bolster the case for rally continuation. As a result, it will force us to abandon our price target of 270$.
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 be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Trade active:
NQ1! briefly broke above the immediate support/resistance. However, it quickly erased gains and fell below the level. So far, we remain committed to our price target of 270$.
Trade active:
Yesterday, we outlined our skepticism and decided not to abandon our price targets on the downside (even after the bullish breakout). Today, the market reacted to the latest employment data by dropping more than 2% within a matter of minutes.
Comment:
We would like to see a breakout below the immediate support level, bolstering the bearish odds (after the retracement).
Trade active:
Today, we will pay close attention to the CPI print. If the price breaks above 293.26$, it will cause us to abandon our price target.
Trade closed: stop reached
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