Guideline For Friday - NQ

On Thursday the market opened with a bearish bias, but relentless buying by the Fed buy programs pushed the market up, NQ just stopped shy of the prior swing high before seller came in and sold it hard, but another rounds of buy programs managed to push NQ back up to close near the high of the day.

With the Fed determined to hold the market up just to show that ending QE would not harm the market look for the buy programs to come in on any attempted sell-off. Whether or not they are able to hold the market up and even push it higher and higher, against global credit contraction, only time will tell.

Key price level for NQ on Friday is 4100.

-- Trading above 4100 is bullish, look for NQ to continue going higher.

-- NQ may try to sell-off again below 4100, supports are 4060, 4045, 4025.

Guideline For Thursday

NQ traded sideways on Wednesday and stayed choppy even after the FOMC minutes was released, but it looks ready to make a sustained trending move from here, the direction is still not clear simply because the market is manipulated and the Fed will continue to buy the market against strong selling pressure as global credit contraction continues to intensify.

Key price level for NQ remains 4080.

-- Bullish above 4080, next resistance is still 4115. A false-break could cause a fast reversal back-down, while a sustained break above 4115 could trigger a sustained short-covering rally

-- Bearish below 4080, supports are 4065, key support is 4040-4045. Trading below 4040 is an indication the uptrend may have reverse, and could potentially drop really fast, if so first target down is 3940.

Guideline For Wednesday

On Tuesday NQ opened with a large gap-up that successfully triggered a short-covering rally lasting all day into the close, with small lunch pullback.

On Wednesday, ahead of the FOMC policy announcement in the afternoon anything can happen, but the normal pattern ahead of the FOMC announcement is usually choppy with a slight bullish bias. 

However, Wednesday FOMC announcement is not a normal one, the big decision is whether to end QE or not to end QE. But whatever their decision may be, the Fed would be ready to support the market with buy programs.

Key inflection price level on Wednesday will be 4080

-- NQ should continue to rally above 4080, next resistance to break is 4115 swing high.

-- Trading below 4080 is an indication NQ is going into another pullback mode, key support is 4045. A sustained break below 4040 could trigger algo sell programs, next support is 4025 and 4000.

Guideline For Tuesday

On Monday, NQ traded sideways, slightly to the bullish side, ahead of the FOMC policy decision announcement on Wednesday, still unable to clearly breakout above 4040 key resistance zone. 

Whether or not it would breakout before the FOMC announcement on Wednesday, only time will tell, but the momentum of the current rally is slowing down, and it could be a setup for the next breakout to the upside or a prelude to a larger pullback down, so going forward the key price level is still 4040.

The Fed would likely be ready with major buy programs after their policy announcement, in which case the market would spike higher breaking above breakout level, unless of course their buy programs get overwhelmed by the sellers.

Cycle high on the daily chart will be on Thursday October 30th this week, the day after the FOMC announcement, and it could produce a spike high followed by a fast reversal down. Failure to produce a reversal is bullish, and could produce a sustained fast move to the upside.

Key price level remains 4040.

-- A sustained breakout above 4040 could trigger short-covering rally targeting a test or a break of the 4115 swing high on the daily chart.

-- Failure to break and stay above 4040 could attract short-selling, supports are 4020, 4000, 3980, 3940

Guideline For NQ on Monday

Relentless buy programs by the Fed engineered to squeeze the shorts continued on Friday, with NQ closing at the day high of the day at around triple-top price zone (October 3 & 8 high).

There should be many stoploss hiding just above 4040 triple-top price level, a very tempting level for the buyers to push above those level inorder to trigger another round of short-covering rally. At the same time, 4040 is certaintly a strong resistance level that has the potential to halt the current rally and reverse price back down.

So, for Monday 4040 will be a key price level to watch for.

--  Above 4040 is likely to trigger short-covering rally, next target us is September 19 swing high, 4115 area.
-- Inability to break and or stay above 4040 area could attract some short-sellers, supports are 4000 and 3980.

NQ Guidelne For Friday

NQ opened with a huge gap-up on Thursday morning, rallied up to the .786 retracement level, a 7-wave rally from the recent low, before stalling and pullback down to 4000 support..

Absent any major buy programs from the Fed, NQ should continue to drop down further on Friday to support 3975-3980, if that does not hold, then down to 3930-3940. 

However, a sustained break above 4025 could trigger another round of short-covering rally, targeting September 19 swing high.

Guideline For NQ on Thursday

On Wednesday, NQ finally had a pullback down day, ending a 4-day rally from October 16 swing low. The rally from last week Thursday low into Wednesday swing high had a 5-wave structure on the 60-minute chart. 

Whether or not NQ will get more than a 5-wave structure (rally), only time will tell, but to do so, NQ would need to stay above 3930 support in order to avoid overbalancing, and should rally into higher high very soon. Failure to make a higher high could indicate that a larger pullback-down is in progress, implies another wave down is likely.

Key inflection price level for NQ on Thursday is 3960.

-- Above 3960 is an indication that the current uptrend is resuming.

-- Below 3960 implies another down-leg is likely, next support is 3930.

-- Breaking below 3930 is liley to trigger algo sell programs, target down is 3895-3900

Guideline For Wednesday

On Tuesday, as expected, the Fed buy programs caused the markets to open with a huge gap-up, with NQ opening above first resistance and rallied, broke above strong resistance, and continued on to rally all day, again with a close at the high of the day.

The Fed buy programs should continue, with or without a paused, designed to run-over all the trailing stop-losses. However, once all stop-losses has been exhausted, the market will need more than just buy programs and short-covering to continue to push the market higher, the market would need genuine buying interest.

Key resistance to break is now 4000.

-- Failure to clearly break above 4000 could attract short-sellers, support is at 3930.

-- Breaking above could result in another large up-day on Wednesday, next resistance is 4050.

Guideline For Tuesday

With the Fed buy programs in full speed right from the open on Monday NQ trend up all day into the close, a third up days in a row. The rally that started from last Thursday swing low is now in its wave 5 up, and in overbought condition on the 60-minute chart, and may be ready to go into a larger pullback-down mode at any time now, but as long as the drop does not violate key support level, the rally should continue.

The Fed is likely to continue to buy the futures market on Tuesday in order to avoid the repeat of recent market collapse.Whether or not they are able to hold the market up against the backdrop of global credit contraction, only time will tell and it will depend on where it trades in relation to key price level.

For Tuesday key price support level to watch for in NQ is 3840.

-- As long as NQ can stay above 3840 on Tuesday it should continue to go up, next resistance is 3895, if that resistance does not hold, then 3930 - a strong resistance.

-- Breaking below 3840 could trigger algo sell programs that could tank NQ quickly down to 3790

NQ Guideline For Monday

The market posted a 2-day rally last week Thursday and Friday likely due to massive buy programs engineered by the Fed. However, the manufactured Ebola scare is really starting to cause panic in the market that could lead to a massive "Crash"

A resumption of the downtrend on Monday is an indication that the decline is very strong and should take out the recent swing low very quickly.

On the other hand, another rally day on Monday would imply that the market is going into a larger pullback - up mode.

Key price level for NQ on Monday is around 3790.

 -- Below 3790 is an indication the downtrend is resuming, next support is 3730 then 3700.

--  Remaining above 3730 implies NQ is still in a pullback-up mode, resistances are 3840-3850, then 3890-3900

Friday Guideline for NQ

NQ found temporary support at yesterday low as NQ on Thursday consolidated between 3700 support and 3800 resistance all day.

Whether or not NQ will continue to consolidate inside the range on Friday, only time will tell, but a breakdown below 3700 support on Friday is an indication NQ is in a "crash" mode. The market, after having been manipulated by the Fed for so long, is very illiquid, without enough buyers to absorb sell orders, the market is susceptible to crashing.

Key price level for NQ on Friday is 3700 support and 3800 resistance.
-- Staying inside the range implies NQ is in consolidation mode before the downtrend resumes.
-- A sustained break below 3700 is very bearish, as it could ignite another round of algo selling and forced margin liquidation.
-- If NQ can mount a sustained break above 3800, it could trigger some short-covering rally as some traders may take profit going into the weekend.

Guideine For Thursday

On Wednesday the downtrend on the daily chart continued. Vix spiked to multi-year high.

On Wednesday, NQ opened with a huge gap-down then rallied up towards resistance, but was quickly sold-off, NQ tanked hard dropping almost 100 points down to strong support before rallying back up over 100 points to resistance before dropping back down into the close, setting up a doji day on the daily chart.

We can now see that the second downleg has extended over 1.618 of the first downleg, qualifying it as wave 3 down. If so, and if wave 3 down has found support at prior swing high, we should see several days of rally before the next downleg, wave 5 resumes. However, if wave 3 is still in progress, NQ should continue to tank on Thursday.

Key price level for Thursday is 3690.

-- Above 3690 implies NQ has found some temporary support to launch wave 4 retracement. with strong resistance at 3800.Typical target for wave 4 retracement are .382 and .50. The 382 retracement is 3830 and .50 retracement level is 3867.

-- Trading below 3690 implies wave 3 is still in progress and look for more forced margin call liquidation decline.

Guideline For Wednesday

Market sell-off continued on Tuesday, with NQ spotting a familiar intraday pattern, morning sell-off that was followed by lunch rally then afternoon selloff going into the close.

The declining momentum seems to have slowed down on Tuesday, and there are 2 possible reasons for that:

1. It may be slowing down before a snap-back rally going into the weekend, or,

2. A running correction, an indication the market is setting up for a massive selloff once running correctionhas ended.

Key support level for NQ on Wednesday will be 3800.

-- Staying above 3800 implies either a potential rally but NQ needs to trade above 3850 to potentially trigger a short-covering rally. Inability to break and stay above 3850 implies choppy sideways pattern.

-- Breaking below 3800 implies the slowing down of momentum is a running correction. If so, it would be followed by a liquidation decline, next support is 3730 and 370.

Guideline For Tuesday

Monday was the 3rd very large down day in a row for NQ, an indication that the sell-off is impulsive, with markets collapsing worldwide. Australia experience their 2nd flash crash on Monday, Japan and New Zealand had their flash crash a few weeks ago, North American market is not immune to it.

On Monday we saw an early morning sell-off that was reversed sharply, likely by the Fed buyers, that was again sold in the afternoon, with the market again closing at the day low, an indication that the buyers capitulated into the close, a characteristics of forced margin selling.

Key resistance for NQ on Tuesday is 3850.

-- Inability to break and stay above 3850 is going to attack more selling, with the next target down  at 3785. If that support does not hold stronger support lies at 3700 - 3730.

-- Breaking and staying above 3850 target the next resistance at 3900.

Guideline For Monday

The market tanked hard on Friday, including NQ which tanked hard for the second day in a row. Whether or not it is going to tank for the third day in a row on Monday, only time will tell. Keep in mind that forced margin selling could tank the market harder and harder as the decline continues --- Potential Crash Scenario

So far, last Friday swing low measured 1:1 down from September 19 swing high. On the daily chart, whether or not the 2nd down leg is wave C or wave 3 from the high, only time will tell, but the momentum on this 2nd downleg is much stronger than the 1st downleg, an indication that it is likely wave 3 down.

If it is wave 3, the 2nd downleg should continue down much further, usually to the 1.618 or larger extension of the first downleg, then we would see wave 4 bounce to be followed by wave 5 down targeting lower low to complete the cycle.

On the 5-min chart key price level for NQ on Monday is 3900.

-- Below 3900 NQ should continue down, next support below Friday low is 3845 then 3825 double bottom support from July and August low. 

-- If those support does not hold the next support below is 3730 and 3700

-- If for some reason the Fed came back into the market and buy aggressively, we could see some short-covering on a sustained break-back above 3900.

Guideline For Friday

Volatility is back

On Thursday, after closing the opening gap, NQ promptly decline breaking key support level 4020 down to its 50-moving average support before bouncing. 

Although it bounce off its 50-ma on the 5-minute chart to re-test the gap-close price level, it was not able to break above it to change the bearish dynamics as it quickly got sold aggressively resulting in a nice 5-wave decline before consolidating. At the end of consolidation, NQ either continues its downtrend or reverses back up, the key will be where it trades in relation to its key price level area.

Key price level for NQ on Friday will be 3985

-- Failure to break and stay above 3985 is an indication NQ is going to resume its downtrend that started on Thursday, and tank down to re-test Wednesday swing low. Breaking below Wednesday swing low could attract another round of momentum algo sell programs than has the potential to tank the market very hard.

-- Staying above 3985 could trigger another round of short-covering, resistances are 4005 then 4025.

Guideline For Thursday

After trending down in the morning on Wednesday, massive buy programs most likely engineered by the FED, designed to panic short-sellers, rocketed NQ upward, breaking through 2 resistance levels before stalling at double-top with Monday swing high. 

Whether or not most of the short-sellers has covered it is difficult to say, but it seems many had covered in panic on Wednesday, so unless real buyers can show up on Thursday NQ can fall back down again.

Key price level for Thursday is 4020.

-- As long as any pullback down does not clearly violate 4020 support the uptrend that started on Wednesday is still alive, the next resistance is going to be 4050 then 4065.

Guideline For Wednesday

On Tuesday NQ opened with a gap-down below support then rallied back up to re-test broken support-turned resistance, twice, before resuming its downtrend that continued on into the close. NQ is in a down-trending mode on both the daily chart and the 60-minute chart.

NQ was in oversold territory at the close so there may be some pullback in the morning, but as long as pullback does not violate key resistance the downtrend should continue, supports are at 3950 and 3930. NQ may have to break below 3930 swing low before a larger pullback is to be expected.

Key resistance on Wednesday is 3975.

-- Below 3975 is an indication that the downtrend is continuing supports are 3950 and 3930.

-- Breaking back above 3975 implies NQ is in a pullback-up mode with resistance at 4000 then 4025

Guideline For Tuesday

NQ opened with a gap-up above key inflection price level 4025 on Monday but failed to trigger a rally, and instead, NQ promptly reverses and sold-off in the morning, dropping down to 3995 support before pulling back up to resistance, and close right in the middle of the range between 3995 support and 4025 resistance.

NQ is set to make a potentially large trending move on Tuesday, either up or down, depending on where it trades in relation to key support and resistance.

Key support for NQ on Tuesday is 3995, key resistance is 4025.

-- Trading above 4025 could trigger algo buy programs that could propel NQ up to 4050 and  4080.

-- Breaking below 3995 is bearish and could trigger algo sell programs that could tank NQ back down to last week Thursday swing low.

Guideline For Monday

Volatility is currently back, at least until last week Friday, VIX level remained elevated, indicating the market is in a larger swing mode, with NQ swinging fast and furious.

Gold and crude oil continued to tank, an indication that global credit contraction is intensifying, and could, at some point, get out of control and crash the stock market.

On Friday, NQ opened with a gap-up above key resistance which trigger massive momentum algo buy programs that rocketed NQ up to the next resistance zone 4025 before trading sideways into the close.

Key price level for NQ going into Monday trading is 4025.

-- A re-break back above 4025 could trigger another round of algo buying programs, next resistance is around 4060 - 4070.

-- Trading below 4025 implies NQ is in pullback down mode, and as long as it does not violate key support 3990 - 4000, NQ should resume its uptrend that started on Thursday.

-- Breaking back below 3990 could trigger momentum algo sell programs that can tank NQ back down to re-test Thursday swing low. 

Guideline For Friday

On Thursday a strong sell-off in the morning was followed by a strong rally in the afternoon as buyers pushed NQ into higher high above morning high before pulling back down into the close. 

For Friday, as long as pullback down move that started late day on Thursday does not continue down in the morning on Friday and violate key support, NQ should continue to  rally. However, in order for the rally to gain momentum, it has to clearly break above 4090-4095 key resistance and trigger momentum algo buy programs.

-- A break above 4095 should propel the rally leg up to 4025 resistance.

-- Breaking back below 3965 could re-test Thursday's swing low.

Guideline For Thursday

NQ opened with a  gap-down and then trend-down all day with a small profit-taking rally near the close. It was a very wide-range down day for NQ on Wednesday. 

Whether or not we will get another large down day on Thursday really depends on where NQ trades in relation to it key support level.

Key resistance is at 3995, key support level for NQ on Thursday will be 3965.

-- Breaking clear above 3995 could trigger short-covering rally with next resistance at 4025.

-- Below 3995 implies a re-test of Wednesday swing low 3965.

-- A clear and sustained break below 3965 could trigger another round of algo sell programs, next support is at 3910.