NQ Guideline for Tuesday

With most weak shorts out of the market the stock market rally stalled in the morning on Monday and then started to sell off after the close of the European markets. NQ sold off all day, down to 4200 support at by the end of the day, setting up a sharp sell-off on Tuesday unless 4200 support can hold.

 

4200 will become key support level for NQ during Tuesday's trading.

-- A sustained break below 4200 has the potential to tri9gger massive algos short selling programs, first support is at 4170, but a strong support is not until 4100

-- If NQ can stay above 4100, it may be able to rally back up to 4245 resistance.

 

Key market driver for Tuesday remains the price of crude oil and the US dollar index.

NQ Guideline For Monday

The threat of further money printing by both the European Central Bank and the bank of Japan has sent the US dollar back up again, now clearly above key line in the sand at 97 for the US dollar index, which sent both the crude oil market and the stock market down on Friday..

 

Further rally in the USD is bearish for both the crude oil market and the stock market. Further decline in the price of crude oil could easily cause a sudden stock market crash that could easily overwhelmed the Fed buying algos, so watch the USD index and the crude oil market for the direction of the stock market.

 

Key price level for NQ on Monday will be 4245.

-- NQ is bullish above 4245 with the next resistance at 4300.

-- Bearish below 4245, with the next support at 4200-4210.

 

Key driver of market direction on Monday will be the crude oil market and the USD.

NQ Guideline For Friday

On Thursday, with the S&P 500 bumping against key resistance price level of 1940, relentless buy programs in the equity market and the crude oil market managed to clearly pushed both markets up, with the S&P clearly breaking and closing above 1940 key resistance.

 

With the public heavily short the markets, look for relentless buy programs to continue until most of the shorts are cleansed. The impact of the Fed buy programs should be short-lived, and once the cleansing of the shorts is complete, the bear market should resumed.

 

NQ is still trading below 4300 key resistance, but with the S&P 500 key resistance clearly broken, it is likely the short-covering in the S&P should be able to drag NQ above 4300 very soon.

 

Key inflection price level for NQ on the 5-minute chart on Friday will be 4210.

-- NQ should remains bullish above 4210, the next resistance is 4300.

-- Breaking below  4210 is an indication NQ is in a larger pullback down mode.

 

The chart below is indicating that the US market is not far from breaking down hard.

 

 

 

NQ Guideline For Thursday

A huge gap-up opening for gold and a huge gap-down opening for the crude oil which threatened to crash the equity market on Wednesday panicked the Fed into taking drastic action. They triggered massive buy programs in the equity market and the crude oil market, pushed both markets higher for the day.

 

The equity market is now back in bullish territory, and only a crash in the crude oil market can derail tomorrow's potential rally.

 

Key price level for NQ on Thursday remains at 4170.

-- As long as NQ can stay above 4170, the rally should continue, the next upside target remains at 4300. With so many traders and investors short the market, a continual push high by the Fed buy programs should lead to more short-covering.

-- A break-back below 4170 is likely to attract more sellers, with first support at 4100.

 

Gold is on the verge of clearly breaking above trend line resistance.

NQ Guideline For Wednesday

NQ opened and trend down all day on Tuesday, breaking and then closing below 4170 support.

 

4170 is going to be key inflection price level for NQ on Wednesday.

-- Trading below 4170 is going to be bearish, and could trigger selling algos. If so, the next support is 4100.

-- Remaining above 4170 is likely to trigger short-covering, first resistance is at 4210.

 

From Bloomberg - Tom Demark:

 

The Standard & Poor’s 500 Index’s rally will give way to a full-blown retreat should the benchmark gauge lose altitude over the next few days, according to Tom DeMark, the chart analyst who predicted an advance in oil earlier this month.

 

A momentum formula employed by the DeMark Analytics LLC founder that compares closing prices with levels four days earlier would issue a bearish signal should the advance fizzle this week, he said. Specifically, it would foreshadow a decline should the S&P 500, which ended at 1,945.5 Monday, slip at Tuesday’s open and close below 1,926.82. Those conditions were met today.

 

The benchmark index slid 0.2 percent at the open and declined 1.3 percent to 1,921.27 at 4 p.m. in New York.

“The foundation of the ongoing rally is suspect,” DeMark, based in Scottsdale, Arizona, said in a phone interview. “The temporary buying produces a price vacuum beneath the market and accelerates the subsequent decline. The decline is going to be sharp.”

 

A handful of chart-based calls by DeMark have looked prescient in recent weeks, including a prediction on Feb. 11 that oil would rally and a Jan. 20 forecast for a temporary bottom in the S&P 500. In the same interview he made the crude projection, he said the S&P 500 might go as low as 1,797. It bottomed that day at 1,810.10 and closed at 1,829.08.

 

Now that this S&P 500 trigger has occurred, the benchmark index will decline at least 8.2 percent from Monday’s close to 1,786, a level last seen in February 2014, according to DeMark. Should the market top correspond with what he referred to as “bad news,” the S&P 500 could see deeper selling down to 1,736, an 11 percent decline. DeMark sees the ongoing market rally as temporary relief as investors exit short positions.

 

“We’ve seen some pretty vicious short-covering come in, which has caused the market to move up,” said DeMark. “When that happens, it really plays havoc with the market once the downside move begins.”

NQ Guideline For Tuesday

A large opening gap-up on the equity market on Monday designed to run-over stop-losses of the shorts, but once weak shorts had covered there was not much follow-through buying activities, and after the initial short-covering panic just after the open, the market drifted sideways in a narrow range.

 

On the 60-minute chart of NQ, Monday's swing high was clearly wave 5 rally as can be seen from February 8th swing low. If so, when wave 5 ends we can expect NQ to pullback down substantially, but how far is difficult to say as it would depends very much on the price of crude oil and the USD/JPY carry trade activities.

 

But keep in mind that the market is very highly manipulated by central banks and as such, anything can happen.

 

For Tuesday key inflection price level for NQ will be 4210.

-- NQ is still in a rally mode above 4210, next upside target is 4300.

-- Below 4210 is an early indication the expected larger pullback down move is in progress, with the main key support at 4175.

 

Margin Debt as % of GDP

Geneva Swiss Bank Just Called The Top On The "Bear Market Rally"

Moments ago, after having called the bear market bounce for what it was just on February 11, and positioned accordingly to take advantage of the expected 6-8% rebound...

 

Swiss private bank Geneva Swiss Bank just called the end of the bear market rally, and has gone back to a market neutral stance.

 

Here is their reasoning:

 

"Dear All,

 

Please note that after this nice rebound in equities, we are moving tactically cautious.

 

Actions taken today: we moved to market neutral (long equities / short index futures) on our new Swiss Tactical Equity Certificate and have bought downside protection on the S&P500 in our portfolios.

 

We believe that :

• This was just a bear market rally driven essentially by hedge funds covering their shorts…
• Many risks including China/CNY, Oil supply, US economy, German economy/social situation, BREXIT, earnings growth, high valuations,  still remain in mind.
• Investors are losing confidence in Central Banks hazardous monetary policies and buying gold as the ultimate hedge."

while stocks have soared relentless into today's latest short squeeze, not only bonds...but the all important USDJPY carry trade,  have both completely ignored today's move in equities.

 

NQ Guideline For Monday

NQ traded sideways inside a very narrow range on Friday, setting up a potential big move trending on Monday.

 

Knowing that the general public is overly pessimistic about the future with most small traders heavily short the market, the Fed is going to aggressively push the market higher in order to run over the stop-loss thus triggering a short-covering rally.

 

Key inflection price level for NQ on Monday will be 4150.

-- If NQ can remains above 4150 the shorts are likely to cover, triggering short-covering rally with the next upside target at 4300, but key resistance remains at around 4200, and in order to get a fast short-covering rally, NQ would need to break clearly above 4200.

-- Trading below 4150 is an indication the current pullback-down move is still in progress. If so the next key support is at 4075, and only a clear break below 4075 could negative the current bullish setup.

NQ Guideline For Friday

Following a multiday short-covering rally the market finally paused and pullback-down on Thursday.

 

Key support level for the current pullback is 4075 for NQ, and as long as NQ remains above 4075, the current short-covering rally should continue once the pullback has ended, the next resistance remains at 4300.

 

After pulling back down for three days following a massive rally, gold rocketed back up again on Thursday, back towards trend line resistance (see chart below). The impetus of the current move was likely due to imminent arrival of helicopter money from the Fed. If so, gold manipulation / gold price suppression scheme, could get unhinged and gold could rocket to unbelievable height in a very short time. 

NQ Guideline For Thursday

It is a well known fact that all markets are heavily manipulated by central banks, with central banks intervening on a regular basis to paint the tape to keep confidence alive.

 

For example, central banks knows that the general public are currently heavily betting on market collapse. With that in mind, the Fed is going to engineered massive buy programs on a daily basis in order to run the shorts over and discourage traders and investors from shorting the market.

 

This trick will work for a while but eventually market forces of deflation will overwhelm and over run central bankers best effort, and the bear market resumes. But for now buy programs is going to continue and run over stop-losses until most of the weak shorts has covered before the bear market resumes.

 

Key support for now will remained at 4075.

-- Above 4075 the bears are going to get over run by buy programs, the next potential resistance is at 4300. there may be pullbacks along the way to 4300 resistance.

-- If, for some unexpected reason, NQ break back down below 4075, the bears are going to again over run the buy programs.

Below is a chart showing the public heavily betting on a big stock market decline, a bullish signal.

NQ Guideline For Wednesday

NQ managed to stay mostly above 4075 key inflection price level on Tuesday. If NQ can stay above 4075 they may be able to forced more shorts to cover, but 4100 remains key resistance to break.

Failure to break above 4100 is likely to attract some selling, first support is 4075.

NQ Guideline For Tuesday

A sideways consolidation day in the equity market on Friday but with the US regular market closed on Monday the illiquid globex market was easily ramp up to above resistance for the NQ market.

 

If NQ can remained above 4075 on Tuesday, it is likely to trigger a short-covering rally that could last several days.

 

Key inflection price level for NQ on Tuesday will be 4075.

-- Bullish above 4075 with the first resistance at 4100.

-- Breaking back below 4075 is bearish and could trigger another could of selling, first support is 3900. 

 

These 4 biggest world banks are all in big trouble and likely to go into bankruptcy in not too distance future.

NQ Guideline For Friday

NQ traded sideways above 3900 key support all day on Thursday with the Fed finally able to rally the market late day into the close.

 

Friday trading will be interesting ahead of the US market closing next Monday and China stock market reopening next Monday after being closed for a week to celebrate the lunar new year. As such, anything is possible, but look for the crude oil market to provide direction for the stock market.

 

Key price level for NQ on Friday will remained at 3900.

-- Selling pressure will remain subdued above 3900, with the first resistance at 4000.

-- A sustained break below 3900 is likely to trigger algo selling programs, next support is at 3700.

 

With the Fed about to join major global central banks into negative interest rates which is bearish for the banks, looks for banks to continue to sell-off.

NQ Guideline For Thursday

Another sideways consolidation type of day for NQ on Wednesday. Attempted rally in both the stock market and the crude oil market failed, with crude oil dropping and closing below prior swing low, setting up a potential liquidation drop that could easily drag  the stock market down with it, and over run the Fed buying programs.

 

With the Fed Chairwoman testifying to congress and senate for the second day on Thursday, look for the Fed to keep trying to support the stock market. Whether or not they will be successful would depends on the price of crude oil.

 

Key resistance for NQ on Thursday will remains 4000, key support is 3900. The key driver on Thursday will remains the price of crude oil.

NQ Guideline For Wednesday

A sideways consolidation day for NQ on Tuesday, stuck between 3900 support and 4000 resistance. It is likely to trade out of the 3900 - 4000 range on Wednesday as the Fed buyers and the market forces of deflation continues to battle it out.

 

A bearish crude oil is likely to drag down the equity market and overwhelm the Fed buyers. A sustained drop below 3900 is likely to trigger another round of liquidation sell programs, with the next key support is not until 3700.

 

However, with the Fed Chairwoman Janet Yellen testifying before Congress and the Senate for the next two days, look for the Fed to trigger non-stop buy programs. How successful will they be would very much depends on the price of crude oil.

 

Here is the S&P monthly chart 

NQ Guideline For Tuesday

On Monday the stock market opened with a large gap-down and then sold hard most of the day until late afternoon when the Fed buyers we finally able to push the market up into the close.

 

A sharp selloff in Asia is dragging the US stock market in overnight trading, and if it continues into the morning we could have another sharp selloff day on Tuesday.

 

Deflationary pressure is starting to grip the global economies and markets and until and unless the Fed announce massive QE4 the markets is going to continue to spiral down, and at some point, it can get disorderly and out of hand.

 

For Tuesday, key support for NQ will be 3900.

-- Selling pressure is likely to intensify below 3900.

-- Selling pressure is likely to be subdued above 3900.

 

The Dow potential downside target

NQ Guideline For Monday

NQ sold off right from the opening bell on Friday, breaking below 4100 key support, triggering massive algorithm selling programs, tanking NQ all the way down to 4000, a potential support for a bounce.

 

But failure to do so is going to trigger another round of liquidation selling with the first downside target is a break below January swing low. Strong support for NQ lies in the 3700 area. 

 

Key support for NQ on Monday is 4000.

-- Selling pressure will be subdued above 4000, with first resistance at 4100.

-- NQ should sell of hard below 4000, next potential support is 3900.

 

NQ Guideline For Friday

The equity market tried to rally but a sharp selloff in the price of crude oil dragged the market down with in. Several attempts to rally the stock market failed as market forces continued to overwhelmed the buy programs. Crude oil will continue to be the main driver of equity market direction on Friday.

 

Key inflection price zone for NQ on Friday will be 4150.

-- NQ is bullish above 4150 but it has to clearly break above 4200 to trigger some short-covering rally, and crude oil should also be in a rally mode.

-- Bearish below 4150 with first support at 4100. A bearish crude oil could tank the stock market hard. 

NQ Guideline for Thursday

Continuous battle between market forces that is pushing the market downward and central banks that is pushing the market up, continues to rage on, causing heightened volatility in all markets, equity, commodities, forex, etc.

 

On Wednesday the stock market sold off hard in the morning until the Fed buyers came in with massive buy programs to push the market up, NQ rallied back up to key price inflection zone 4190-4200, which should remains the key price zone for Thursday.

 

If the Fed can push NQ back up above 4200 it could trigger some short-covering which may propel the market higher.

 

However, inability for NQ to break-back above 4200 could attract renewed selling, support is again 4100.

NQ Guideline For Wednesday

An overnight selloff in crude oil dragged the equity market down with it. NQ opened with a gap-down below key support on Tuesday, then trend down all day broken below another crucial support 4200.

For Wednesday, a failure to trade back above 4200 is likely to trigger another round of liquidation selling, the next support is 4100.

Selling pressure should be subdued if NQ can trade back above 4200.

Key driver for the equity market would remains the price of crude oil

NQ Guideline For Tuesday

Another up day in the market on Tuesday as shorts continued to get squeezed and forced to cover. The up trending pattern should continue with the next upside target at 4400 for NQ

 

However, before moving up to that target, NQ may need a pullback down to 4240 - 4250 area before moving up to 4400, as long as pullback down move does not get out of control and clearly break  below downside target and key support. 

 

Key support zone for NQ on Tuesday will be 4240 - 4250 area.