Trade Guideline for Friday

NQ has been staying inside a narrow trading range 2325-2340 for the last 2 trading days. A successful break above the range high in the morning implies the morning trend is likely Up.

Likewise, a successful break below lower trading range 2325 implies the trend is likely down on Friday morning.

Staying inside the range implies more choppy ranging market condition.

Trading Guideline For Thursday (NQ)

2330 is Support/Resistance for Thursday.

• Bullish above, targeting 2345-2350
• Bearish below, targeting 2310-2320

Trade Guideline For Wednesday (Nasdaq NQ)

Daily and 60-minute trend are UP. 

• Staying above 2312, the trend would likely continue to go up on Wednesday to the following resistances levels. Resistances are 2330, then if that breaks, the next one above is 2345. 
• If the opening price action is below 2312, then the above analysis is invalidated. If so, I will be looking for the morning trend to be down

Trade Guideline for Tuesday (NQ)

On Monday, after spending most of the day inside a trading range, NQ broke down below range low end of day Monday. If the decline is going to continue to tuesday, any rally should stay below FT Pivot 2305.50 and prior trading range low 2309-2312 zone.

I will also use 2309-2313 as key Line-in-the-Sand for Tuesday.

• Looking for Monday's end of day decline to continue as long as any rally can stay below LIS
• Above the LIS, I will be looking for a bullish day.

Trade Guideline For Monday (Nasdaq NQ)

2320 = Key Line-in-the-Sand. 

• Above 2320 I will be looking for NQ to trend up in the morning targeting next resistance level at 2345. It is also a  potential reversal zone
• Below 2320 I will be looking for NQ to trend down in the morning targeting next support level at 22955. It is also a  potential reversal zone

***Note: Not expecting reversal at the above support and resistance zone if market internals are extreme bearish/bullish.

Trade Guideline for Friday (NQ)

The day after a one directional trending market tends to be a choppy ranging and narrow range type of day. So unless price action indicates otherwise, I will be looking for a ranging market on Friday.

Trade Guideline for Thursday (NQ)

2263 - 2265 is my balance Point for Thursday, bullish above, bearish below.

• Above  is bullish targeting 2280, and if that break, next resistance and target is 2300
• Below is bearish, first target is Floor Trader's Pivot 2257.25, below that supports are 2245 then 2235.

Trade Guideline for Wednesday (NQ)

On Wednesday I am looking for the market (NQ) to either rally above Monday's high or decline below Monday's low.

• I will use 2266.25 as key resistance, bullish above targeting a move up to 2280, then if that break, a further rally up to 2295-2300, 
• 2245-2250 as key support, with a break below targeting a decline down to 2235, then if that breaks a further decline down to 2220.

Trade Guideline for Tuesday (NQ)

As indicated in my trade guideline for Monday, the 60-minute chart pullback mode was triggered with a large gap-up open above key resistance level of 2250 on Monday. 

• However, after an initial burst of short-covering rally in the morning, NQ then spent the rest of Monday's afternoon  consolidating the morning uptrend.

For Tuesday, 2245-2250 will be my key Line-in-the-Sand Zone for establishing bias. 

• Staying above that zone implies the next upleg should rocket up to 2290, and if that breaks, the next higher target is 2300-2305.
• Breaking below the 2245-2250 zone implies a potential decline down to 2335, then if that breaks, a further decline down to 2215-2220 area.

Note: Always watch out for Whipsaw market conditions

Trade Guideline For Monday (Nasdaq NQ)

Daily chart currently showing that the market is in a very strong downtrend mode, ready to tank if key support levels are breached. The 60-minute chart, although in a very strong downtrend, is showing a potential pullback coming, and it could come Monday morning, 

I will be using 2220 as key Line-in-the-Sand for NQ on Monday for determining the bull-bear bias, bullish above, bearish below

• Key resistance is 2235, above it I target a move up to 2250, and expecting it to hold unless Market Internals are extreme bullish. 
• Key Support level is 2215, below that level I will be looking for NQ to trend down to 2195 - 2200 area. If the decline is accompanied by extreme bearish  Market Internals, I will be looking for NQ to tank down to 2285 area, and if that is breached, will look for capitulation decline down to 2150-2160 area.
• A Flash-Crash will target 2050 --  possible if Yen Carry Trade gets unwind

Trade Guideline for Friday (NQ)

For Friday, my price inflection point is 2225, and I will be looking for the usual Friday rally, right from the opening bell or after a morning decline, and it will depend on the level of the opening price in relation to the inflection point.

• Opening above 2225 and then staying above, I will be looking for immediate rally targeting 2250, *** unless of course market Internals are extreme bullish. If so, I will be looking for the market to blast through 2250.
• Below 2225, I am looking for the market to decline to 2209-2215 and looking to go long within the price zone, *** unless of course market Internals are extreme bearish. If so, I will not buy the support zone, but instead, looking to stay on the short side down to test Wednesday's low or lower low.

Stoploss Caveat: The market will always come back,... but when? that is the question every trader needs to decide for him or herself. Trend can go longer than we can stay solvent, hence.. the case for using stoploss.

Trading Guideline For Thursday

I will be using 2215 as key level to use.

• Downtrend to continue below 2215
• Looking for consolidation above 2215, targeting 2245 - 2250 area.

Trade Guideline for Wednesday

For Wednesday I will be looking for the downtrend to continue with price below 2270, with key support support at 2243.

• Below 2243, I will be looking for a test of Tuesday's low.

Trade Guideline for Tuesday - CRASH ALERT

Following multiple explosions at Japan's nuclear reactor, Japanese Nikkei Futures took a very steep dive, taking down the global equity market with it.

Without any concerted intervention by world central banks overnight prior to the opening bell on Tuesday morning, it is possible that we will see a major stock market sell-off / crash right from the opening bell on Tuesday.

• If so, I will be looking for 2250 as first support, then 2200.
• Below 2200, next lower support is 2050

If the futures market can stabilized at the open on Tuesday I will be using 2280 as key Line-in-the-Sand.

• Bullish above

Trade Guideline For Monday (Nasdaq NQ)

For Monday I will be looking for the market to first retrace Friday's afternoon wave 1 or A rally (W2 / B), then once that is completed, looking for the market to commence wave 3 or C rally.

Note: The above scenario is NOT valid if the open is outside Friday's range, and then stay outside Friday's range.

I will use 2295 as inflection point. 

• Above 2295, resistances are 2310, 2320 and then 2330.
• Below 2295, Supports are 2285, then 2275.

NQ Friday's Trade Guideline

On the 60-min chart, Thursday's large gap-down open was likely wave 3 of C, followed by wave 4 of wave C. 

• If so, I will be looking for wave 5 of C in the morning, with potential target of 2256 area, to complete the sequence. 
• Once completed, I will be looking for the usual Friday afternoon rally.

I will use 2285 as Friday's Line-in-the-Sand. 

• A gap-up opening above 2285 will be bullish, looking for a strong rally up to 2305, then 2320, then 2330
• Below 2285, I will be looking for another leg down, w5 targeting 2265, then 2255 area.

Trade Guideline for Thursday

Wednesday was a consolidation day, so I would expect the market to trend on Thursday, and the direction would depends on the opening price action.

For NQ I will use 2310 as Key Line-in-the-Sand. 

• Bearish below 2310, hence looking for the market to trend down to 2295 as first target down, then 2285 then 2275 and 2265. 
• Bullish above 2210, targeting 2230, then 2245

Correlation between Quantitative Easing and S&P 500 Chart

The following chart shows a very close correlation between the Fed's Quantitative Easing and the S&P 500 index.

NQ Trade Guideline for Wednesday

I will use 2330 as key inflection point for Wednesday.

• ==>> Above 2330 I will be looking for the market to be bullish and trend up to 2360, then if that does not reverse the trend back down, the next target up is 2375.
• ==>> Below 2330 i will look for the market to trend down to 2306, then if that does not reverse trend back up, the next downside target is 2293.

Trade Guideline for Friday

Expecting Friday to be a choppy non-trending day.

• Looking to go long on any decline down to 2360-2365 or 2355 targeting 2385-2390.
• Looking to go short on any rally up to 2385-2390, targeting 2360-2365 or 2355.

Bulls are still winning the battles

Trade Guideline for Thursday

As expected, Wednesday was a consolidation inside day following a trending down day on Tuesday. I will use 2320 as my key Line-in-the-Sand for Thursday.

• If the market is ready to trend back down, price should break below 2320, then breaking below Tuesday's low, targeting a move down to 2295-2300 then 2285.
• Above 2320 I will look for price to go back up to 2330, then 2340-2345 then a test of Tuesday's high.

Market Internals to watch Intraday

On an intra-day basis "Market Internals" can help us decide whether or not we should trade in one direction all day (trend day) or whether we should look for trend reversal at some point during the day.

Whatever decision we take can have a very dramatic impact on our trading account balance. Correctly anticipating a reversal when the market is going to reverse and correctly staying with the one-way trend when the market is not going to reverse is key to maximum profit.

The mistake of most traders is either not watching the "appropriate" "market Internals" or not watching it at all. The following will list the market internal readers that I find very reliable and the ones that I would watch all day long.

• 1. $TRIN (also called ARMS Index)
• 2. Advance-Decline Line (NYSE)
• 3. $TICK (NYSE)
• 4. $BKX (Banking Index)
• 5. Nasdaq (Nasdaq is a leading indicator)

I will outline the levels to watch in my next blog