NQ Guideline For Monday

Short-covering was triggered on Friday as NQ open just below 4200 key inflection price level, but immediately rallied above it which triggered short-covering activities that lasted all day long.

 

On Monday, as long as NQ can stay above 4200, the rally should continue, 4200 level is now becoming key support price level.

 

The next resistance for NQ is 4300

NQ Guideline For Friday

The stock market opened with a huge gap-up on Thursday following the Fed overnight ramp up, but the market immediately sold off hard, down to key support of 4100 for NQ.

 

NQ is now stuck for two trading days below key inflection price zone between 4190 and 4200.

--NQ needs to convincing break back above 4200 to trigger another round of short-covering rally.

- If NQ remains below 4200 it is likely to stay choppy and trade sideways, with the key support level at 4100.

-- NQ would need to break below 4100 to trigger another round of algo selling. But without a selloff in the crude oil, any selloff could be short-live.

NQ Guideline for Thursday

The stock market sold off hard after the released of the FOMC policy decision on Wednesday. The panicked Fed took advantage of Facebook better than expected earning reports to trigger massive buy programs to push the market up.

 

Whether or not the buy programs will continue into Thursday, we just have to wait. But the forces of deflation continues to accelerate, tanking market all over the world.

 

Key support level for NQ on Thursday will be 4100

-- Trading above 4100 should keep short sellers in check, key resistance is again 4190-4200.

-- Trading below 4100 is likely to trigger another round of sell programs, first support zone is 4040-4050, then 3900.

 

Here is the weekly chart of high yield bond index compared to the S&P 500. Notice that since the end of 2011, the HYG has been leading the stock market to the upside, then from mid 2015 the high yield bond index has been leading the market to the downside, indicating that the bear market may starts to accelerates to the downside.

NQ Guideline For Wednesday

Another sideways consolidation day in the market on Tuesday, with NQ continuing to trade above 4190-4200 key price inflection level.

 

NQ would need a convincing break below 4190 to trigger another round of selling. As long as NQ can stay above 4190, it is either continuing to trade sideways or rally.

 

The price of crude oil should remains the main influence on the direction of the stock market.

 

Here's the current market selloff compares to other previous bear markets.

NQ Guideline For Tuesday

With crude oil selling off on Monday, after rallying to a higher high in early afternoon NQ sold off hard into the close, breaking below key support zone, setting up a bearish day on Tuesday unless NQ can get back above 4200 and crude oil rallying back up.

 

With the price of crude oil likely to tank further on Tuesday, unless the Fed intervene aggressively overnight to push the crude oil price up, the equity market is very likely to get drag downward.

 

Key price inflection level for NQ on Tuesday will be 4200.

-- NQ is bearish below 4200, with first support at 4170. A break below 4170 is likely to tank NQ hard, especially if the price of crude oil continues its selloff.

-- Breaking back above 4200 and a rallying crude oil price should push NQ back to higher high above Monday swing high.

NQ Guideline For Monday

With a continuing rally in the crude oil price, which is bullish for the stock market, major stock indices opened with a gap-up and then trend up all ay on Friday.

 

As long as the crude oil price can continue to rally or even stabilized the Fed buy programs designed to run over stop losses should continue to push the stock market up.

 

For NQ the next upside targets are 4350 to 4450. Whether or not it can reach there would depends on the price of the crude oil.

 

Key support for NQ on Monday will be 4190 - 4200.

-- As long as NQ can stay above 4190 with the oil price rallying or consolidating NQ should continue to go higher.

-- Trading below is bearish and more so if the price of crude oil is also in a sell mode.

NQ Guideline For Friday

Massive intervention by the Fed, the PBOC and the ECB to support the market and prevent a free fall has temporarily stalled the collapse. The key support level for Hong Kong stock market is 8000, as a sustained break below 8000 could trigger a massive derivative selling that could quickly crash the Hang Seng index down to a much lower level, dragging the world market down with it.

 

As such, the current market may temporarily stall and bounce. How far and how long it is difficult to say, it will depends very much on the price of crude oil.

 

Key price inflection level for NQ on Friday remains at 4100.

-- Selling pressure will be muted above 4100, with strong resistance at 4200 - 4210. A clear and sustained break above is likely to trigger some short-covering rally.

-- Breaking below 4100 could trigger another round of selling, especially if crude oil price is also in a sell mode.

NQ Guideline For Thursday

With crude oil price in free-fall, the stock market sold off hard on Wednesday morning, threatening to crash precipitously, sending the Fed into panic mode again.

As a result, the Fed  engineered one of the biggest buy programs ever, sending NQ up almost 200 points from the low of the day. But with the momentum of the crude oil price still in crash mode, the rally may be short-lived. The equity needs the crude oil price to stabilized in order to get a sustained short term bounce.

Key price level for NQ going into Thursday trading is 4100.
-- Selling pressure should be subdued above 4100, the next resistance is 4200.
-- Trading below 4100 can attract another round of algo sell programs, the next support is 3900

Key driver for the equity market remains the price of crude oil and the price of the Chinese currency. China needs at least a 50% devaluation to slow down China's financial collapse, which tends to drag down the rest of the world.

NQ Guideline For Wednesday

With crude oil tanking again on Tuesday NQ sold off hard in the morning and early afternoon down to 4100 support and then bounce off in a rally into the close likely due to the end of day buy programs by the Fed.

 

With the price of crude oil still in free-fall look for the equity market to continue to sell-off. A break below 4100 for NQ could trigger another round of algorithm sell programs, and the next support is again the double-bottom low in September at around 4040, then the double-bottom low with August 2015 swing low at 3900.

 

NQ probably would need to take out one of the above double-bottom before a large snap-back rally can be expected

 

Just in the first 12 day of 2016 China spent over 100 billion dollars to support the Yuan

NQ Guideline For Tuesday

The stock market was closed for Martin Luther King holiday on Monday, but last week Friday was a huge sell-off day, the stock market remains in crash mode, with NQ breaking down below my 4100 support zone before rallying back above it in the afternoon.

 

The momentum of the current decline on the daily chart has not slowed down a bit, an indication there is more room to the downside before a significant counter-trend rally can be expected. In order to get a short-term bottom in the stock market the price of crude oil needs to stabilize and it is currently still in crash mode as well.

 

Key price level for NQ on Tuesday will be 4100.

-- Trading above 4100 should relieve some selling pressure.

-- Trading back below 4100 could attract more selling, the next potential support is double-bottom support at September 2015 swing low around 4040

NQ Guideline For Friday

With the equity market ready to crash again soon after the open on Thursday the Fed went into panic mode, hinted QE4 and triggered one of the biggest non-stop buy program ever, pushed price up all day.

 

Whether or not we can get a follow-through buying on Friday would depends on whether or not the Fed will come back with another rounds of buy programs. If they do, we should see either another up day or a sideways consolidations.

 

Key price level for NQ on Friday will be around 4260

-- If NQ can stay above 4260 then sellers will be kept at bay, but NQ would need to trade above 4300 to trigger another rounds of Fed-led short-covering rally.

-- Seller will be back below 4260. If so next support is at 4200.

 

Key market driver would remains the price of crude oil. As long as the price of crude oil can stay above $30 the equity market should stabilize a bit. 

NQ Guideline For Thursday

The market sold off hard on Wednesday clearly indicating the market is in crash mode. But with the market participants clearly in capitulation mode the market should find some support soon and then bounce to relieve the extremely oversold condition.

 

However, if that does not happen buyer anticipating a bounce could again bail resulting in a acceleration is the stock market crash.

 

Key price level for NQ in Thursday will be 4210 resistance and 4170 support.

-- Above 4210 selling pressure should be subdued, first resistance above is 4260

-- Selling pressure should resume below 4210, but major algo selling should hit the market below 4170. If so, the next downside target is at 4100, but 4100 could easily be exceeded if selling momentum accelerates.

 

NQ Guideline For Wednesday

Monday nigh buying binge by the Fed managed to cause a gap-up opening for the major equity indices, including NQ, on Tuesday. As the oil price rally started to fade soon after the open it dragged down the equity market. The market sold off hard most of the day but buy programs managed to push the market up in late afternoon trading.

 

With President Obama addressing the country for his state of the union address on Tuesday night it is very likely buy programs is going into overdrive on Tuesday nigh and into Wednesday. If so, look for another up day for the market on Wednesday. However, a selloff day on Wednesday is an indication the market is in crash mode. If so, the downside target remains at 4100.

 

Key inflection price level for NQ on Wednesday will be 4300.

-- NQ will come under heavy selling pressure below 4300, but it needs to break below 4260 Tuesday swing low to trigger massive algo selling programs.

-- Selling pressure will be muted above 4300.

 

Key trend drive remains the price of crude oil.

NQ Guideline For Tuesday

The equity market continued to collapse along with the crude oil price collapse on Monday. Finally, with the markets deep in oversold territory, the panic Fed were finally able to push the market up at the end of the day on Monday.

 

Whether or not they are able to hold the equity market up on Tuesday will depends on the price of crude oil, and for NQ, where it would trade in relation to its key price level.

For NQ key price level for Tuesday will be around 4300.

-- Trading above 4300 will relieve some selling pressure and may cause more short-covering rally, with the next resistance at 4350.

-- Trading below 4300 is bearish and implies a re-test of Monday low. But NQ would need to break below 4200 to trigger another round of margin selling, the next potential support is still at 2100.

NQ Guideline For Monday

The equity market continued to decline on Friday with some profit-taking rally during midday but then the bear market resumed in the afternoon.

 

Although the market was already in oversold territory on Friday, the intensity of the current selling pressure, likely due to margin selling, is still in acceleration mode as of Friday, so whether or not we would get a consolidation day on Monday it is difficult to say, and it will depends on several factors, first is the price of crude oil and then second where NQ trades in relation its key price level.

 

For Monday key price level for NQ is 4300.

-- NQ needs to break back above 4300 and stay above 4300, in conjunction with rally in the price of crude oil, to relieve selling pressure. If so, resistances are 4330 and then 4350.

-- NQ will remains under heavy selling pressure below 4300. A continual push lower could accelerate the margin call selling and can get the market into disorderly decline. A bearish crude oil price will drag the equity market downward. The next potential support level for NQ is still at 4100.

NQ Guideline For Friday

Another selloff day in the market on Thursday. NQ opened with a huge gap-down of over 100 points. Then after a brief countertrend rally, sold off all day into the close.

 

The selloff in the market is far from over, but with a potential end of the week profit-taking by the short seller and a very oversold market condition on the daily chart, a one or two day bounce is possible.

 

However, in order to do that NQ needs to stay above 4330 on Friday then break above 4400 along with rally in the crude oil market. A continual selloffs in the crude oil market will drag the market down.

 

Trading below 4300 is likely to trigger another round of algo sell programs, with the next downside target remains at 4100. 

NQ Guideline For Thursday

A huge opening gap-down for the equity markets on Wednesday with NQ opening down below the crucial 200-day moving average on the daily chart.

 

Buy programs managed to rally NQ back up to re-test the broken 200-DMA from below. However, unless NQ can clearly break-back above its 200-DMA now at around 4460 NQ is in a freefall mode.

 

Following another day of Chinese stock market crash on Thursday trading NQ is now trading over 50 points down during evening globex trading. If the bearish sentiment continue into the open on Thursday and stays below the 200-DMA, look for sellers to sell the market hard.

 

Potential support remains at 4100.

NQ Guideline For Wednesday

Following a huge down day on Monday, NQ traded sideways in a consolidation pattern on Tuesday. NQ could go either way on Wednesday, either continuing to consolidate for another day or resume the downtrend, and the direction of the move will be based on where NQ trades in relation to key price level.

 

Key price level for NQ on Wednesday will be Monday swing low at 4430, and 4430 area is the 200-DMA for NQ on the daily chart, a strong support zone.

-- A clear break could unleash an avalanche of algo sell programs. The next major support for NQ will be 4100. Whether or not NQ can drop down there in one day it is impossible to predict.

-- Trading above 4430 will keep selling pressure in check. Resistance are at 4500, 4580 and 4600.

NQ Guideline For Tuiesday

Following China's stock market crash on Monday the US equities sold off hard during Sunday night trading and opened with a huge gap-down. NQ opened down over 100 points on Monday and then sold off hard, only to be partially rescued by massive Fed buy programs near the close.

 

The rally should be short-lived unless of course the Fed is willing to spend unlimited amount of money to buy all the stocks just like they are doing in the bond market. But printing unlimited amount of money to support the market could risk collapsing the dollar, a delicate balancing act indeed.

 

Both the S&P 500 and Dow Futures have broken below their respective 200-DMA, thus in order to at least temporarily stall selling avalanche both has to re-break back above their 200-DMA. Failure to do so should intensify selling pressure and can easily drag NQ down below its 200-DMA.

 

Leading indicator is now indicating that recession in the US is imminent, if not already in recession.

NQ Guideline For Monday

A gap-down and trend down day for NQ on Thursday. Looking at NQ pattern on the 60-minute chart, from Tuesday December 29th day high to Thursday swing low, it was a clear 5-wave decline.

 

Although it has not gone into oversold condition on the 60-minute chart, if wave 5 down has ended NQ should rally on Monday.

 

Key support for NQ on Monday will be 4580.

-- Trading above 4580 is an indication NQ is either in a rally mode or a sideways consolidation mode. NQ would need to clearly break above4630 to trigger short-covering rally. If so, the next resistance is 4660.

-- Trading below 4580 is likely to trigger a another round of algo sell programs. If so the next potential support is at 4500.