Trade Guideline For Wednesday

On Tuesday, NQ briefly pullback down in the morning to complete wave C down before rallying all day, closing at the day high. For Wednesday, continuing rally or a pullback down.

Key level For Wednesday is 2882.

-- Above 2882 implies the uptrend that started on Tuesday morning is still in progress.

-- Breaking below 2882 is an indication that pullback is in progress, if so, look for ABC way down

Trade Guideline For NQ on Tuesday

On Monday, Nasdaq rallied in the morning then pulling back in the afternoon, breaking down below key equilibrium level at 2867 area, setting up a potential wave C decline in the morning on Tuesday.

Key Level To watch on Tuesday is 2867.

-- If NQ can stay below 2867 area in the morning on Tuesday, look for the trend to be down, a declining wave C or 3.

-- However, if instead, price is above 2767 and stay above 2867 in the morning then Monday's afternoon pullback has ended, and the pullback was in fact, a setup for the next leg up.

Trade Guideline For NQ on Monday

Friday was a down-morning and up-afternoon. For Monday there are 2 possible trend directions depending on where NQ trades in relation to key price level.

Key Price Level For Monday is 2833 area.

-- Above 2833 is bullish, upside target is resistance No.1 2855.

-- Below 2833 target a decline down to first support 2817. 

NQ Trade Guideline For Friday

Early morning breakout and rally to resistance for NQ on Thursday, then followed by sideways consolidation into the close.

For Friday, support is 2838 and resistance is 2855. A clear and sustained break our of the 2838 - 2855 trading range would cause a trending move out of the range, in the direction of the break, targeting the next support or resistance level.

Trade Guideline For NQ on Thursday

Wednesday was the second consecutive sideways consolidation day, but it may be ready to trend again, either trending up or trending down.

Key level to watch on Thursday is 2840 resistance and 2820 support.

-- A clear and sustained break out above 2840 could trigger a short-covering rally, with the next resistance at 2759.

-- A clear and sustained break below 2820 could trigegr a long-covering decline, with support at 2805-2810, then 2780-2785

-- Failure to breakout and stay out fot he range 2820 - 2840 implies continual sideways consolidation.

Trade Guideline For NQ on Wednesday

On Tuesday NQ continued to rally into resistance in the morning before consolidating the rest of the day. 

On Wednesday, as long as it stays below 2832.50 NQ should continue to pullback down towards supports 2805, then if that does not hold the next support is 2780.

A sustained break-back above 2832.50 may trigger another round of short-covering rally, next resistance is 2857.

Trade Guideline For NQ on Tuesday

A gap-up open on Monday, and after an early morning pullback down to support, rallied up to resistance before dropping down on end of day profit-taking activities. 

On Tuesday, failure to continue to rally above 2810 implies NQ is going into a pullback mode down, either choppy sideways consolidation above support, or sharp reversal back down breaking support

For Tuesday, key level to watch for is 2810 resistance.

-- Below 2810 implies NQ is either in a pullback mode. Supports are 2794, 2780 

-- Above 2810 implies more short-covering rally, next resistance is 2835, 2859

Trade Guideline For NQ on Monday

An up-trending day on Friday, with a trend-up morning and consolidation pullback afternoon into the close.

If Monday is another up day then price should stay above equilibrium price level 2770, with or without a gap-up open.

Below 2770 implies NQ is going into a larger consolidation, with first support at 2750, the Thursday swing low, or another trending down day if it can break and stay below below Thursday swing low. Staying above Thursday swing low implies consolidation trading range type of day.

NQ Trade Guideline For Friday

Another large down-day on Thursday with profit-taking rally into the close. Whether or not the end of day rally is going to continue on Friday depends on where it trades in relation to key level, which is 2750 on Friday.

-- A clear break above 2750 has the potential to trigger a short-covering rally, with first resistance at 2767, then 2785.

-- Bearish below 2750, but it needs a clear and sustained break below 2725 to trigger another round of selling algorithm, with next support at 2710, then 2700. If a break below 2725 triggers a strong declining momentum, look for supports to break.

Thursday's Trading Guideline For NQ

On Wednesday NQ opened with a gap-down below 2805 support which turned into resistance, after a brief re-test, giving us opportunity to go short, collapsed towards 2755 support, stopped just above it.

On Thursday key level is 2775.
-- Bearish below 2775, but it will need a clear and sustained break below 2755 to trigger selling algorithm that can lead to liquidation decline.
-- Bullish above 2775, may trigger short-covering rally to 2805-2810 resistance zone.

Trade Guideline For Wednesday

A gap-up and trend-up day on Tuesday. Key level on Wednesday is 2830. 

-- Rally should continue above 2830 with the next resistance at 2857 area (double-top). There is a minor resistance at 2845 area that may stall price rally.

-- A pullback down below 2830 with support at 2805-2810

Trade Guideline For tuesday

A nice 5 wave decline from the opening high to afternoon low for NQ on Monday.

For Tuesday as long as pullback up does not clearly break above the FT Pivot area 2800 we should see another down-trending day.

However, a clear and sustained break above 2800 could either lead to a sideways consolidation or a short-covering rally. Resistance is 2829.

Gold Margin Selling

The Fed's attack on Gold may have backfired badly and the unintended consequences may get out of hand very quickly. 

Gold 10-Year Chart

Margin selling on Monday, which may continue into Tuesday, tank gold market hard, but it is not just gold that tank. Panic selling spread to many asset classes including stocks and commodities because traders who suffered losses in their gold trade has to sell whatever they own in order to meet their margin call. 

Next Support Levels are $1,345 then $1,290, but keep in mind that during a major liquidation selling could slice through support levels without pausing. 

Short is still the preferred trade direction until price action indicates otherwise. If the 2008-style market meltdown has been triggered, then gold may tank all the way down to $1,000 before finding support.

Another unintended consequences of the action of pure academics at the Fed, which they would never foresee, simply because they do not understand real world events, is the credit contraction caused by loss of confidence due to panic selling in gold that spread to other asset classes.

The current stock market bubble that the Fed has carefully engineered over the last several years may have unwittingly been popped. A sell-off in the stock market and the resultant credit contraction that will follow will cause interest rate to spike and the bond market to collapse.

Spiking interest rates and a collapsing bond market and the stock market is a perfect recipe for global financial meltdown. With central banks out of bullets, the meltdown will collapse most western government and their banks.

Trade Guideline For Monday (NQ)

Key Level For NQ on Monday is 2845 area.
-- Bullish above, either a trending move above last week high or pull back down from last week high which is now resistance.
-- Bearish below 2845 area, with support coming in around 2824. It would need a very bearish market internals to clearly break below 2824 support. Otherwise, it will rally back up from support.

Gold Smackdown

A very pathetic result of a major coordinated attack on gold orchestrated by the Fed through COMEX and London Metal Exchange, produced a mere $80 per ounce total decline in gold price, but closing only about $60 down from prior day close. 

The main goal of the coordinated attack is to prevent the inevitable collapse of the US dollar and to shake out the holders of futures contract who are planning to take physical delivery of the gold which the exchanges do not have.

Key point to remember as to why Gold smack-down occurred:

1. Both COMEX and London are running out of physical gold to meet the contract physical delivery obligations. 

Otherwise there is no reason for the US to invade Libya who has 450 tons of gold reserve just enough to satisfy Venezuela's gold repatriation request, and invasion of Mali who produce just enough gold over a 7-year period, just enough quantity to satisfy Germany's repatriation request promised to be delivered over a 7-year period.

2. The attack on gold is to discredit gold as an alternative reserve asset to the USD. 

Make no mistake, the sun has set on the US dollar as a reserve currency. Australia being the latest major country to abandoned US dollar as a reserve currency. Central banks are rapidly converting their US dollar holdings into gold. When the trillions of US dollar now being held at Central Banks around the world, unwanted and unloved, starts to come back to the US soil, the US dollar will collapse in a rapid fashion.

The coordinated attack on gold started last week with:

1. The released of the FOMC minutes stating that the Fed may end their QE program soon. 

2. The announcement by the EU that they are going to sell 400 tons of Cyprus gold reserve

3.  The closing of the Physical Gold Trading Platform in London designed to trap the holders of long gold bullion contract, forcing them to go Short the Futures Contract, and to eliminate potential buyers of gold bullion.

4. The naked short-selling of 400 tons of gold by the Fed agents right at the open on Friday, designed to crash price below key gold support level $1,540, and triggers stop-losses sell orders propelling price decline.

It does not matter what the market manipulators are doing. My proprietary band is still telling me to stay on the sell side of the gold market. with the next downside target price of $1,450 to $1,410. Where and when gold price will stop falling only time will tell.

But a credit collapse like the 2008 has the ability to tank gold as well as every asset prices. This time, credit contraction will be much more severe than the 2008 collapse. The Fed and Western Central Banks are out of bullet. Interest rate is already zero, and debt level is already way too high.

The coming sequence of events will start with Sovereign (country collapse), banking collapse, credit collapse, asset price collapse, massive central banks QE response to "save" the collapsing financial system, then currencies collapse, then the new monetary system based on some form of gold standard, new prosperity. 

Trade Guideline for Friday

A sideways consolidation day following a large trending up day on Wednesday. Key resistance for Friday is around 2857.50.

As long as price cannot breakout above, but more importantly, if it cannot stay above on a break, look for NQ to continue to consolidate sideways.

A clear and sustained break above 2857.50 could lead to another fast rally.

Trade Guideline For Thursday

Massive buy program likely engineered by the Federal Reserve after the release of the FOMC minutes before the market open pushed the equity indices into higher-high. 

For Tuesday, as long as the Fed remains in the market, it is either going to trend up again or goes into choppy sideways consolidation.

As Japan goes into QE overdrive, Japanese Yen is in free-fall

Trade Guideline For wedensday

Early morning decline stay above key support level and above the band on Tuesday which eventually lead to a fast short-covering rally breaking above resistance

On Wednesday key level to watch for is 2800.

-- Continuing short-covering rally above 2800.

-- A clear break below 2800 implies wave A down is in progress, and, if it is followed by a choppy pullback up to the band, it should then lead to wave C or 3 decline. Supports are 2785-2790 strong support, then 2772.50

Trade Guideline For Tuesday

NQ continued to rally / pullback up on Monday, up to just below strong resistance 2785-2790 area at the close. Unless NQ can clearly break above resistance, and then stay above resistance it is likely to pullback down to support on Tuesday. 

If so, and as long as 2770 support is not clearly violated, it should then continue to rally back up to try to break resistance.

A clear break below 2770 implies NQ is ready to trend back down, with supports at 2755 then 2740. 

The market is clearly topping with Nasdaq leading the way down.  Clear divergence between Dow and other markets (Charts from Elliott wave Int)

Trade Guideline For Monday in NQ

Worse than expected employment report released before the market opened on Friday resulted in a big gap-down open. Buy programs kicked-in immediately right from he opening bell, which resulted in ABC wave pullback up, with the low-risk wave B pullback buy entry opportunity between 1.30 to 2.30 pm eastern time.

Whether or not we would get a follow-through selling on Monday only time will tell, and will be based on price action in relation to NQ's key support/resistance equilibrium level at 2750 area.

Key Level For Monday is 2750.

-- Above 2750, look for NQ to try to close the gap from Friday's open.

-- Below 2750 look for NQ to try to resume its downtrend, with key support at Friday's swing low.

Trade Guideline For Friday

Wave 5 down finally ended with a cross above the band during the lunch hour, wave 1 or A.

-- As long as price remains above the band on Friday the rally that started during the lunch hour on Thursday should continue.

-- A break-back below the band implies the end of the rally leg, whether it is an ABC wave or 1-2-3-4-5 wave.

NQ Intraday Update on 5-Minute Chart

NQ attempted rally soon after the open produced a small but invalid penetration above the band, stopped just below FT Pivot resistance. It quickly dropped down impulsively, on subwave wave 1 of 5, down to S1 support and 2770-2775 prior resistance now support (see 60-minute chart February 8 to February 20 highs).

 A clear break above the band that is followed by a choppy pullback down to the band confirms wave 5 down has ended and that wave A or 1 up is in progress, first target is the FT Pivot resistance.

Below the band implies wave 5 down is still in progress, next downside target is 2755 prior swing low.

NQ Trading Guideline For Thursday

Wednesday was a down-day for NQ with the opening near the day high with the close near the day low. Whether or not the Wednesday's decline has ended we have to wait for Thursday.

Key Level For Thursday is 2792.50 area.

-- A break above 2792.50 area implies Tuesday's-Wednesday decline leg 1-2-3-4-5 has ended. If so, it should be followed by a pullback up, in the form of ABC Wave pattern or 1-2-3-4-5 wave pattern., with the first set of resistance at 2805-2810.

-- Below 2792.50 implies more decline to follow, with the next support at 2770, then 2755

NQ 5-Minute Chart

Intraday 5-Minute NQ Chart

This morning open was a wave B pullback sell at the open. 

The current downleg is either wave C or 3, once completed should break-back above TD proprietary band. A break-back above the TD proprietary band confirms the end of the current downleg, and will set up a pullback wave B buy.

Trade Guideline For Wednesday

Nasdaq continued to rally, making another new higher high on Tuesday, in a snail pace. Support for Wednesday is 2805.

Above 2805 implies Tuesday's afternoon pullback has ended, and NQ should make another higher high. Below 2805 implies pullback is still in progress withe the next support at 2795, and then 2785.

Cyprus Finance Minister Resigned

BIS is coordinating plans to expropriate bank depositors

Expropriating large depositors at troublesome banks is now international policy coordinated by the Bank for International Settlements, GoldMoney's Alasdair Macleod writes today, and while distribution of one's deposits to preserve coverage by government deposit insurance may provide some protection, in the end any wealth held in the international banking system is vulnerable.

"That the BIS feels it has been necessary to co-ordinate G20 nations into a common approach to bank rescues using uninsured non-monetary and financial institutions' deposits is evidence that bank failures capable of threatening the global financial system are definitely an ongoing risk,"

S&P 500 E-Mini Chart (ES)

S&P 500 is still solidly in an uptrend on the daily chart. As long as price remains above the band (see chart below), the better trades are to buy pullbacks. 

However, it is in wave 5 up from the November 2012 swing low. Once completed it should reverse and tank hard. The 2 prior tops, April 2012 and September 2012 requires a re-test of the high before before it tanked.

ES Current Daily Chart

NQ Daily Chart

NQ is in its final leg up, W5, of the current uptrend that started in November 2012. Whether or not it will break above prior swing high, September 2012, only time will tell. If it does break, targets are 2925 and 2950.

As long as price action remains above the band, the trend is still up, and the trade will remain buying the pullbacks.

NQ daily Chart

Trade Guideline For Tuesday in NQ

On Monday, NQ opened above broken resistance but failed to stay above, implies it was going to drop back down towards support around 2775-2780, which it did, bouncing off just above support for end of day profit-taking activities, stopping right at key inflection point 2792.

On Tuesday, Key Line-in-the-Sand  POC is 2792.

-- Staying below 2792 implies further decline, with the next support is at 2775. Failure to rally from 2775 is a clear indication that it is going to drop down further to the next support level which is at 2755 area.

-- Trading above 2792 implies NQ is trying to re-test 2810 resistance again. Whether or not is is going to re-break above 2810 and then rally further to 2830, only time will tell.