Tuesday, August 13, 2013

Guideline For Wednesday

After quickly dropping down to support in the early morning, massive and sustained buy programs, likely from the Fed pushed NQ up all day to new high, with some profit-taking decline into the close.

With a strong positive momentum going into the close the expectation is for a gap-up open in the morning. If so, look for a high-probability gap-close trade at the opening bell. If the uptrend is to continue right away, gap-close should serve as support for the next leg up.

Breaking below the gap-close however implies NQ is going down to the next support at 3130 before bouncing.

A gap-down open would nengate the above analysis, then key resistance and line-in-the-sand would be at gap-close