Guideline for Thursday

On Wednesday, ahead of the FOMC announcement, NQ opened with a gap-down and then after running down to test support, rallied all day making a higher-high.

NQ has now rallied three day in a row, so Thursday will be an important day to watch because it could be another up day to make it the fourth up days in a row, or a reversal-down day.

Key inflection price level for Thursday is 3570, key support is 3540 (Wednesday's swing low).

-- Above 3570 implies NQ is still in fast mode up, short-covering should continue, next upside resistance is 3600, 3620 and 3670.

-- Trading below 3570 is an indication NQ is in a down-mode, next support is 3555, then 3540. A break below 3540 implies the current three day rally has ended, and the market is resuming its downtrend on the daily chart, next support is 3500, 3480 and 3400.

As expected, the Fed continues its QE tapering agenda, reducing monthly asset purchase by another $10B.

Guideline For Wednesday

On Tuesday NQ opened with a gap-up and then pullback down to support before rallying back to break above Monday's swing high. As long a Tuesdays low is not violated NQ should continue to rally to higher high.

Key inflection price level on Wednesday is 3555. 

The FOMC will announce their policy statement at the usual time in the afternoon. Look for the market to chop around until then, but expect the market to make a sustained move after the FOMC announcement.

-- Continual rally above 3555, next resistance is 3600 then 3620 and 3670

-- A resumption of a downtrend below 3555, next support is 3500, then 3480 and 3400. Any sell-off that clearly breaks below 3480 could trigger massive selling algorithm.

The Fed is expect to announce another $10B asset purchase reduction on Wednesday, down from the current $55B to $45B per month, and it would be bearish for the market, it could start the usual summer selloff. See the chart below, the market sell-off each time previous QE were terminated.

Guideline For Tueday

NQ dropped down to support 3480 on Monday and then rally on huge algorithm buy programs, likely engineered by the Fed ahead of their policy announcement on Wednesday.

The Fed may continue to push the stock market up ahead of their planned $10B reduction in their monthly bond and mortgage purchases, reducing the monthly amount down to $45B from the current $55 B per month.

The the Fed would go ahead of their planned reduction the market could star the usual annual supper sell-off. With most investors still holding their long position in the equity market a sustained sell-off could get out of control very quickly.

For Tuesday key inflection price level will remains at 3530.

-- Bullish above 3530, but it will need a clear and sustained break above 3530 to trigger another rounds of momentum algo buy programs, resistance are 3600 and then 3620. 3620 is a very strong resistance, it would need massive buy programs to break through it. A clear break will catapult NQ to 3670.

-- Bearish below 3530, first target down is 3500 and then again 3480. A clear and sustained break below 3480 will trigger massive momentum algo sell programs that should tank NQ quickly down to 3400.

Military conflict in Ukraine is getting worse by the day. Mayor of Karkiv in Eastern Ukraine got shot at the back

Guideline For Monday

NQ opened with a gap-down on Friday and trend down in the morning, then spent the rest of the day consolidating sideways, closing at key price level for Monday, 3530

On Monday, the first move in the morning will depends on where it trades in relation to key price level 3530. It is either a rally up to resistance, and if resistance is not violated, then dropped back down to lower low below Friday swing low. If resistance is clearly broken, it should continue to rally.

If it trades below key inflection price level, then the morning move should be down to supports, 3500 and then 3480

U.S. officials and security specialists are warning that Russian hackers may respond to new sanctions by attacking the computer networks of U.S. banks and other companies. If so, it could cause the market to crash.

 

Guideline For Friday

The beginning of the annual bearish period, May to October, is almost upon us, the month of May is fast approaching, the market always sell-off during the months of May to October. As we approaches the bearish period, rally often get sold off fast, just like the price actions on Thursday morning, as the funds download their position on unsuspecting investors.

These type of price actions should continue, the so called "pump and dump" with funds selling-off their position on any rally, but they will make sure that no technical damage is inflicted on the charts. Once most of the insiders are mostly out of their longs, the summer sell-off should  begin, and usually at a slow pace to start with.

With the Dow and the S&P 500 just below the previous swing high, the insiders should continue to push the market up, and would love to see a higher high, particularly for the Dow and the S&P 500, so that they can exit their positions at a good price level.

Key price level for NQ on Friday is again 3585.

-- Continue rally above 3585, with strong resistances at3620. If that breaks, the next resistance is 3670

-- Bearish below 3585, support are at 3550, then 3530.

Guideline For Thursday

As expected, Wednesday was a pullback-down day for NQ with the close near the low of the day. However, after the released of Apple and Facebook earning after the market has closed, NQ rocketed to above Tuesday's swing high.

NQ has stayed above Tuesday's swing high since the released of the earning reports, and if it can stay above Tuesday's high at the open on Thursday it has the potential to trigger a fast short-covering rally, as long as key support is not violated on any pullback down.

Key price level for NQ on Thursday is 3585.

-- As long a it can open and stay above 3585, it will be bullish, the next upside resistances are 3620 then 3670.

-- Below 3585 is an indication that NQ  is heading towards Wednesday's closing price.

Guideline For Wednesday

An open-drive up type of day for NQ on Tuesday, but at the end of the day, it looked set for a pullback on Wednesday. How far will the pullback be would determine if a pullback is just a quick pullback before rallying back up again, or is it going to pullback down for a few days.

Key price level for NQ on Wednesday will be 3585.

-- Trading above 3585 is an indication that short-covering should continue, but strong resistance reside at 3600 and 3620. It would requires a big algo buy programs to rocket through those resistance levels. 

-- Trading below 3585 implies a likely pullback-down scenario. As long as NQ does not break below Tuesday's swing low, the rally should resume, but it will needs to clearly break above 3585 to trigger a potential fast short-covering rally.

S&P 500 and the Dow are both not very far from breaking the previous swing high, they could pullback before a break or they may break the high before pulling back. The jury is still out.

The conflict in Ukraine continues to get worse, and should continue to influence the markets.

Guideline For Tuesday

The market continued to rally in a slow choppy fashion on Monday, making it the fourth up-days in a row for NQ. The choppy slow rally is either be a setup for a pullback-down move on Tuesday or a running correction, a setup for an explosive up-move on Tuesday.

If it is a setup for a pullback-down move then it should decline on Tuesday by breaking down below key support price level. But if it is a running correction, which is a setup for an explosive move, then it should continue to push higher and trigger a fast short-covering rally.

Key inflection price level is 3545 for NQ

-- Trading above 3545 implies NQ is still in an uptrend, and if it continues to push higher, could trigger a fast short-covering rally, with the next resistance at 3600.

-- Trading below 3545 is an indication NQ is in a pullback-down move, with key support at 3530. As long as 3530 hold in any decline NQ uptrend should resume after a pullback.

-- However, clearly breaking below 3530 could trigger momentum sell algo programs, with support at 3500.

Conflict in Ukraine continues to get more serious by the day, and it should continue to have substantial influence on the actions in the markets..

Guideline For Monday

With the market closed for easter last Friday, Thursday was the third pullback up-day since making the low on April 15, thus making Monday a key decision day in the market, it is either a down-day or another upday, depending on where it trades in relation to key inflection price zone.

For Monday morning, key inflection price level will be 3530 for NQ.

-- Above 3530 is bullish, an indication that NQ is going higher, with the next resistance at 3560 and then 3600 which will be a strong resistance.

-- Bearish below 3530, an indication NQ is going into a pullback mode in the morning, with key support at 3500. As long as 3500 support is not clearly violated, NQ has the potential to resume it uptrend, with 3530 as key level to break-back above inorder to attract momentum algo buy programs.

-- Clearly breaking below 3500 is an indication that Monday could be a down-day. Next support is 3480.

Military and financial conflict between the US and Russia over Ukraine, should continue to strongly influence the financial markets on Monday.

Guideline For Thursday

With most traders out of the office for the long easter weekend, I am not expecting a trending day on Thursday, in fact, the market may just chop around inside a trading range -- could be narrow trading range -- on Thursday. With that in mind, we must always be on a lookout for the unexpected event that can move the market, such as the conflict in Ukraine.

Key support for NQ on Thursday is 3480 and 1840 for ES. As long as support hold the market should stay on the bullish side. The market has to clearly break below key support price level to trigger algorithm sell programs.

Guideline For Wednesday

On Tuesday, after opening and then rallying up to 3500 resistance NQ quickly reversed back down breaking all support levels on its way down to 3400 double-bottom support with February swing low. ES dropped down to Monday's swing low before bouncing and rally back up to resistance.

With the Fed Chairperson scheduled to speak tomorrow, Wednesday, it was very likely the Fed who engineered the massive buy programs triggering massive rally, to ensure there is not much technical damage to the market indices.

With the Fed buy programs expected to continue on Wednesday and Thursday ahead of the long Easter weekend, we could see massive 2 days rally, on Wednesday and Thursday.

Key resistance for NQ on Wednesday is 3500, and for ES is 1840 for ES

-- Trading above key resistance should trigger a short-covering rally, with NQ resistances at 3540 and 3600, for ES the next res is 1860 and 1878.

-- Below 3500 for NQ and below 1840 for ES is an indication the market is going into a down-mode, a consolidation down or a resumption of the downtrend. 

-- As long as key support is not clearly violated, 3450 for NQ and 1824 for ES, the market should continue to go up. Breaking below key support will attract momentum algos, targeting a break below Tuesday's low.

GOLD - With the proxy war between the United States and Russia over Ukraine intensifying, and in order to protect the US dollar from collapsing, the Fed engineered a large price decline during overnight thin trading, with gold opening with a gap-down of over $30 per ounce.

Guideline For Tuesday

The market opened inside prior day trading range, and stayed inside prior day range, a sideways consolidation an inside day, setting up either for another pullback day, if it can clearly stays above key inflection price level, or a resumption of the downtrend if it clearly trades below the inflection price level.

Key inflection price level for NQ on Tuesday is 3470 and for ES it will be 1822.

-- Resistance are 3500 for NQ and 1834 for ES.

-- Supports are 3375-3400 for NQ and 1775-1785 for ES

The military and economic conflict between the United States and Russia over Ukraine is intensifying, and things can get out of hand very quickly. It will continue to be a major influence on the markets.

Guideline For Monday

Another down day on Friday - the second down day in a row. As long as Friday high is not viloated, the downtrend should continue, the next major support at 3400 for NQ and 1786 for ES

Key inflection price level for Monday is 3455 for NQ and 1812 for ES

-- Trading above inflection price level is an indication the market is going into consolidation mode, but it needs to break above Friday's swing high to trigger a fast short-covering rally.

-- The downtrend continues below inflection price level, next target is 3400 for NQ and 1786 for ES.

Trade Guideline For Friday

The market sold-off hard on Thursday erasing all the gains from the last 2 pullback-up days, including Wednesday's Fed engineered rally.

Led by the Tech stocks NQ erased all the 2 day's of gain and a little bit more in just one day as NQ tanked over 124 points on Thursday.

After breaking below Wednesday's swing low (support), and then successfully re-tested the broken support - turned resistance -- Wednesday's swing low, a new rounds of algorithm sell programs hit the market, tanking the market hard.

NQ would now needs to break-back above Thursday's swing high to reverse the downtrend. For now, the market is in crash mode.

Key inflection price level for NQ in Friday is 3500, and for ES is 1834.

-- Failure to break-back above inflection price level implies the market is still in fast mode down, next support for NQ is 3400, for ES is 1786.

-- Above inflection price level implies the market is in a pullback-up mode / consolidation mode with key resistance at 3540 for NQ and 1844 for ES.

With so much leverage in the market, it should not surprise anyone if the stock market crashes, and with the market now being mostly controlled by algorithm, and not by human, it can tank harder than the crash of 1987, see the chart of the 1987 stock market crash below.

Guideline For Thursday

On Wednesday the market opened with a gap-up above prior day high and then when support held on a test, shorts began to cover and it lasted until the end of the day, with a close at the day high.

The uptrend should continue on Thursday as long as any pullback down move does not violate key inflection price level - key support.

Key inflection price level for Thursday is 3575 for NQ and 1860 for ES

-- Above 3575 for NQ and 1860 for ES the market should continue its fast trend up, resistances are for NQ are 3600, 3620 and 3640, and 1876 and 1894 for ES

-- Below 3575 and 1860 is an indication NQ and ES are both going into a colsolidation mode, supports are 3540 for NQ and 1850 for ES.

Wednesday was the second consecutive up-day, and it would need to break below Wednesday swing low to trigger another round of selling algorithm.

The pace of short-covering accelerates after the released of the FOMC minutes

Trade Guideline For Wednesday

A consolidation / inside day for NQ on Tuesday, but ES broke down to lower low below Monday's swing low before rallying back into Monday's trading range.

Whether or not the market would need another pullback-up day on Wednesday would depends on where it trades in relation to Tuesday's swing low.

Key inflection price level on Wednesday is 3520 for NQ and 1844 for ES.

-- Above inflection price level the market is going higher, but it would need to break above Monday's swing high to trigger short-covering rally.

-- Bearish below inflection price level, but it would need to clearly break below Tuesday's swing low to trigger momentum sell algorithm.

Guideline For Tuesday

The market opened with a gap-down and then  rallied up to key inflection price level, but failed to break above hence attracted algorithm sell program that tanked the market down to make another lower low, down-trending day.

For NQ Monday was the third day down, and for ES it was the 2nd day down.Whether or not Tuesday is going to be another down day or pullback consolidation day would depends on whether or not they can take out their respective key resistance.

Key inflection price for NQ on Tuesday is 3500, and for ES it will be 1840.

-- Above inflection price we could see the market rallying up to key resistance, 3550 for NQ and 1860 for ES.

-- Failure to break clear above key resistance should attract another round of algorithm sell programs, and likely to make another down-trending day targeting lower low below Monday low.

Key support for ES is 1830. 

-- A clear break below 1830 could attract major momentum algorithm sell programs that could tank ES all the way down to the next support 1785

N

Guideline For Monday

On Friday, massive algorithm sell programs triggered at the open continued all day long - the main reason for the sell-off is likely the conflict between the Russian and the American over Ukraine. But whatever it was the selloff was massive, with small profit-taking rally near the close.

Whether or not the sell-off needs to be consolidated on Monday, only time will tell, and it will depends on where it trades in relation to key price inflection level.

For Monday, Key price inflection level is 3540 for NQ and 1860 for ES

-- As long as NQ can stay above 3540 it is going into a consolidation mode, resistance at 3580. ES resistance is 1868 and 1876.

-- If 3540 and 1860 does not hold momentum algorithm sellers would come back into the market, next support for NQ is 3500, and if 3500 does not hold, the next support is not until 3400.

Pro-Russian protesters walk across barbed wire as they storm the regional government building in Donetsk. Photograph: Stringer/REUTERS

Guideline For Friday

NQ opened and quickly tried to breakout above prior day high on Thursday  but failed, attracting sellers, tanking it hard as NQ finally bounced off 3610 support area.

Friday tends to be a choppy sideways type of day as traders closes their positions ahead of the weekend, unless unexpected market moving news trigger a move out of the range.

Key price inflection level is 3635, support for NQ on Friday is 3610, resistance are 3650 and 3670.

-- ADR target up = 3693

-- ADR target down = 3580

ES key inflection rice level is 1880, support is 1876, resistance is 1886

Guideline For Thursday

Wednesday was a pause day for NQ as it traded sideways in a narrow range with the close near the day high. ES was a little more bullish on Wednesday as it traded in an uptrending mode.

If consolidation is completed, NQ should trend back up on Thursday with the next resistance at 3680, 3700 and 3710. ADR upside target is 3710.50 

Inflection price level for NQ on Thursday is 3655, and for ES is 1881.

-- Bullish above 3655 for NQ, and above 1881 for ES.

-- Bearish below 3655 for NQ, with first support at 3635. Breaking below Wednesday's low could trigger algorithm sell programs. ADR downside target is 3601.75

-- ES first support is 1874

Guidline for Wednesday

On Tuesday, NQ opened with a gap-up above key inflection price zone, and as expected, triggered massive algorithm buy programs, rocketing NQ quickly up to ADR target before trading sideways during lunch and then continued back up in the afternoon and into the close, closing near the high of the day.

Bullish momentum into the close, implying a gap-up open on Wednesday. If so, as long as price can stay above the open, the morning trend should be up. 

Breaking back below open implies a move down to close the gap, or even trend down in the morning down to supports.

A gap-down, however, is potentially bearish, particularly if price can stay below the open.

Key inflection price level for Wednesday is 3635

-- Bullish above, first resistance is at 3560, ADr upside target is 3692.

-- Bearish below, first support is 3625, then 3600, ad ADR downside target is 3578.25