Trade Guideline For Monday

The US Fiscal Cliff discussion should continue to dominate the financial news and the market on Monday. Although the discussion is just a distraction strategy designed to hide the real issue of unsustainable debt level, traders and the Fed will use it as an excuse to trigger buy and sell programs, hence can exacerbate the momentum of the moves.

Key Level For Monday is 2620.
-- Below 2620 NQ is in a downtrend, and staying below 2600 could trigger another round of sell algorithm that could cause a fast liquidation decline, next support is 2560.
-- Above 2600 implies potential pullback up to 2620. It needs a clear and sustained break above 2620 to trigger a short-covering rally.

Fiscal Cliff Sideshow continues

Trade Guideline For Friday

Nasdaq broke below key 2620 support soon after the open on Thursday but quickly rallied back up above, closing just above 2620 support.

For Friday, support is 2600.

-- A break below 2600 could trigger another round of liquidation sell-off.

-- Above 2600 implies more consolidation. A sustained break above 2640 could trigger a round of short-covering rally, with next resistance at 2660, 2680 and 2690

Fiscal Cliff discussions should continue to dominate the financial news and the market..

Trade Guideline For Thursday

On Wednesday, NQ opened and quickly dropped down to key support at 2620 before consolidating and closing just below 2640 broken support now resistance.

2620 is a very important support for NQ. 

-- A clear and sustained break below could potentially trigger a cascade of selling, with the next support way down at 2560 then 2490.

-- If it can stay above 2620 NQ would either continue to go sideways or rally, with resistance at 2640 then 2660.

Trade Guideline For friday

Nasdaq continued to consolidate all day on Thursday closing just above 2690 key level. 
-- Below 2690 implies it is still in consolidation mode with supports at 2655 and 2640.
-- NQ would need a clear break above 2705 to trigger a short-covering rally.

Trade Guideline For Thursday

Nasdaq consolidated just above broken resistance now-support 2690, which is key support level for Thursday. 

-- A break below 2690 implies consolidation/pullback is still in progress with supports at 2680 then 2655.

-- A break-back above 2705 implies consolidation/pullback has ended, and the next round of short-covering rally is in progress, targeting 2740, then 2770.

Trade Guideline For Wednesday

Nasdaq opened on a wave 3 gap-up and then trend-up all day on Tuesday, closing at the day high, and in wave 5 up on the 5-minute chart from December 14 low. 

Once wave 5 up has ended, it should then reverse and retrace the entire 5-wave rally.

Key price level on Wednesday is 2705. 

-- A clear decline below 2705 implies W5 has ended and a retracement/consolidation is in progress, with supports levels at 2655, 2640.

-- Above 2705 implies W5 is in progress with the next resistance at 2740 and 2775.

Trade Guideline For Tuesday

Nasdaq stayed above key 2620 support level on Monday and then rallied, breaking above 2640 and 2660 resistance,  closing at the high of the day.

Support level on the March contract is now 2655 and 2640.

-- Above 2640 NQ should continue to rally towards the next key resistance 2692-2700

-- Below 2640 implies it is going back down to support 2615-2620.

The magnitude of the Liberal Democratic Party’s win in Japan’s election yesterday smoothens the path for fiscal stimulus in early 2013 as incoming Prime Minister Shinzo Abe seeks to end the economy’s contraction

http://www.bloomberg.com/news/2012-12-17/ldp-landslide-win-clears-pipes-for-japan-fiscal-spigot-economy.html

Trade Guideline For Monday - NQ

Key support level for NQ on Monday is 2620. A clear and sustained break below 2620 could trigger a round of liquidation selloff, with next potential support at 2600, but on a strong sell-off, NQ will slice through 2600. Supports below 2600 are 2580 then 2560.

Above 2620 implies more consolidation with resistance at 2660, 2680, 2700

US is fast approaching their fiscal cliff.

http://www.businessweek.com/articles/2012-05-17/the-fiscal-cliff-will-drive-the-u-dot-s-dot-into-recession

NQ Trade guideline For Friday

NQ is still stuck inside a trading range between 2620 support and 1700 resistance. Until we can get a clear break out of the range, it should continue to trade sideways.

Resistances are 2680, 2700

Supports are 2640, 2620

Trade Guideline For Thursday

Unable to break above 2700 resistance, NQ traded sideways in a consolidation mode on Wednesday  Unless it can clearly break above 2700, NQ should continue to consolidated or pullback down to support.

Resistance is now 2700 

Support is 2640.

Fed's announcement of QE4 to infinity did not help the market at all on Wednesday.

Trade Guideline For Wednesday

Tuesday was a short-covering trending-up day. It is likely to continue with or without a pause / consolidation day.

Key level to watch is 2700. A clear and sustained break above 2700 could trigger another round of short-covering rally. Failure to break clear would likely result in a sideways consolidation day with 2660 and 2640 as support. 

Trade Guideline For Tuesday

A sideways consolidation day on Monday, unable to stay below 2640 key support level, likely ready to rally back up again.

Support for Tuesday is 2640, and key resistance is 2660. 

-- A clear and sustained break above 2660 could trigger another round of short-covering rally, next upside target is 2700 resistance.

-- Potential sell-off below 2640.

Fiscal Cliff

Trade Guideline For Monday

Key level for Monday is 2640. A bounce above and more decline below.

-- A Bounce above 2640 with key resistance at 2660, potential short-covering above 2660.

-- More selling below 2640, with key support at 2620, potential liquidation below 2620..

Fiscal Cliff

Trade Guideline For Thursday

Another non-trending sideways day on Wednesday with a bearish tone. The expiration of the Bush tax cut that may not be renewed by Obama is triggering an exodus of capital outflow from the US, with bearish implication for the US market. 

Whether or not the sell-off will gain traction only time will tell as it is fighting against the usually bullish Santa Clause rally period.

But for Thursday, key level is 2630.

-- Bearish below, implying more selling with the next support at 2620 then 2600.

-- More sideways consolidations above 2630, with resistance at 2700.

Trade Guideline For Wednesday

A sideways consolidation day on Tuesday, trading mostly between 2660 support and 2675 resistance. 

It would need a clear and sustained break out of the range to trigger short-covering on an upside breakout and liquidation decline on a breakdown.

Trade Guideline For Tuesday

Nasdaq opened with a gap-up into 2700 resistance then quickly reverse back down closing near the day low, basically a gap-reversal day on Monday.  

Key level for Tuesday is 2700

-- Below 2700 NQ is in a pullback mode, with supports at 2660 then 2640.

-- It needs a clear and sustained break above 2700 to trigger another round of short-covering

Trade Guideline For Monday

NQ paused at double-top resistance on the daily chart. Resistance are 2695 and 2710.

Going forward, it either break through double-top resistance soon or pullback before breaking through. In any case, the market is bullish ahead of Q4 announcement expected to be announced in January 2013. Expect more short-covering into the Santa Clause rally period.

QE 4 - To be announced in January