NASSIE, where do we go next?

The market will be split between these 2 directions over the coming days and I can make a good argument for both though the bearish scenario looks a lot more obvious given the recent price action, technical breakdowns and hot inflation reports. Just remember, there's always a thin line between what the market makers make you feel will happen vs. what ultimately happens. We've seen some good examples of that since September 2020 already hence why it's important we don't lose focus on the bigger macro picture.

In a nutshell:

Ultimate bear scenario is for NDX to go as far down as 14385 and even 14030/13765 if 14950 and 14760 are consecutively lost. I personally don't believe this scenario will play out though it is a possibility I will be considering. The close today and tomorrow are crucial.

Ultimate bull case scenario is to find strong support around 14950/15000 on NDX however there are many headwinds ahead. NQ needs to recapture 15152, 15312 and 15415 to start building some short-term bullish bias. The real test and decisive moment for the index will be around 15550/15600.

We may have already started a bear market or we may be deflating the froth to enable bulls for the remainder of the year, I favor the later despite seeing new challenges and choppiness ahead.

Comment:

What a session yesterday! NQ rallied 2% into cash session only to go down over 4% in after hours trading. As I mentioned yesterday, NQ needed to capture 15152 followed by 15312 and 15415 to start building bullish momentum. We started the day by recapturing 15152 previous support and headed towards 15312, where we seemed to have a brief break above but then miserably failed to hold and the index completely broke down for the 3 hours leading into close. Where the sell-off started, the timing of the day it accelerated and the power behind it ultimately meant 14950/15000 had no chance or reason to hold.

Bears are in control now and the next levels to watch for on NQ are 14600, 14370 and 14000. 14600 is key for the index to hold itself together.

Comment:

Expecting a very strong reversal within the next two cash sessions, either today or Monday.

Comment:

The bear scenario that I originally thought was less likely to happen is going full-steam ahead. NQ floating right at October support without any sign of recovery yet and 14000 doesn't seem far-fetched anymore. The only technical bull sign is that the index is oversold on the daily. Infact, it's been the most oversold since March 2020 and every-time we go under 30 RSI, a sharp reversal takes shape shortly after. Technicals aside though, this move and the next major one expected on Wednesday will all go down to 1 man: Jerome Powell.