NQ Guideline For Friday

A large decline for NQ on Thursday morning and into the lunch hour before the afternoon trend reversed the decline and rally half way up, and back above previous triply bottom that was violated in the morning on Thursday.

 

Key inflection price level for NQ on Friday will be 5643.

-- If NQ can stay above 5643 on Friday it should rally back up and up or traded sideways, resistances are 5710 then 5740.

-- Should NQ drop back down below5643 it could attract heavy selling that has the potential to tank NQ down, the lower supports are 5580 double bottom with April pullback low. If that is broken then the next support zone are 5480 then 5450 strong support. 

NQ Guideline For Thursday

On Wednesday, after briefly breaking below Tuesday swing low buy programs was triggered, and it did not stop until the close, with NQ closing at the day high, setting up a bullish day on Thursday, and more so if buy programs continues.

 

This whipsaw price actions, where we get a big drop one day, then followed by a big rally the next, is going to intensifies as topping pattern gets more mature, and the beginning of a bear market gets closer and closer.

Key inflection price level for NQ on Thursday will be 5740.

-- As long as NQ can stay above 5740 selling should be under control, but resistance are 5775 then 5795. A clear break above 5795 is an indication NQ is on its ways to test the recent high of 5900, and should break above 5900 before a major pullback.

-- Should NQ failed to break above 5795, abut instead trade back below 5740, selling could come back in, and indication the next large NQ down day is coming.

NQ Guideline For Wednesday

As expected, with NQ trading below key price level, contagion from failed European banks triggered intense selling on Tuesday and NQ tanked hard.

 

Come Wednesday, without trading back above key price level, selling pressure will get more intense because everyone is long the market, and forced to sell as the market continue to decline, there is no buyers except central banks, and for now they don't seems to be able to stop the decline.

 

With everyone long the stock market, the lower the market goes the more intense selling will become, a potential flash crash scenario.

 

Key price level for NQ on Wednesday will be 5700.

-- Failure to break back above 5700 is going to trigger another round of selling, potential supports are 5643 then 5580. Strong supports is not until 5450.

-- Breaking back above 5700 should relieve selling pressure. Resistance are 5775, then 5795

 

NQ Guideline For Tuesday

Central banks induced rally on Sunday night designed to cause a gap-up opening on Monday thus trigger a short-covering rally to prevent global financial contagion from two Italian banks that collapsed last week Friday.

 

The stock market did opened with a gap-up on Monday, and a huge gap-up open for NQ. However, heavy selling came in soon after the open and then continued all day long into the close with some lunch bounce.

 

Come Tuesday central banks is certain to intervene aggressively to prevent further contagion and market meltdown, but fear of contagion has now permeates inside the psyche of traders and investors. As such, going forward, the stock market volatility is likely to start increasing. It is just the characteristics of topping pattern and actions.

 

On the daily chart, NQ looks ready to tank hard. Key price level for NQ on Tuesday will be 5795.

-- If they are able to push NQ back up above 5795 and remains above 5795 then selling pressure should be kept under control, and NQ can rally, resistance is again at 5860

-- Should NQ failed to re-break back above 5795, heavy selling should resume, lower supports are 5700 (the 50-DMA on the daily chart) then 5643, a triple bottom low with June 12 and 15 low.

 

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When banks fail and regulators decide to liquidate them, it happens on Friday evening so that there is a weekend to clean up the mess. And this is what happened in Italy – with two banks

NQ Guideline For Monday

A sharp decline below support soon after the open on Friday was aggressively bought. Buy programs designed to rally the stock market up lasted most of the day on Friday.

 

NQ closed at the high of the day, setting up a bullish day for Monday, as long as it can remains above key support price level of 5795. If so the next upside resistance is 5860.

 

Should NQ break below 5795 lower support are 5783 and then 5775

 

The latest data means that contrary to previous calculations, central banks are now injecting a record $300 billion in liquidity per month, above the $200 billion which Deutsche Bank recently warned is a “red-line” indicator for risk assets

NQ Guideline For Friday

On Thursday, after pulling back down to support in the morning NQ rallied back up in a choppy manner but eventually breaking through resistance before pulling back down to re-test broken double-top resistance now support.

 

Key price level on Friday will be 5775-5783 support zone.

-- If NQ can remain above 5775 on Friday NQ should rally back up to at least retest Thursday high. Breaking above Thursday swing high could either catapult NQ up to 5860 resistance or reverse back down to support again as Friday tends to be a choppy type of day.

 

The stock market is going through a topping process that should soon ends and then begin its bear market.

 

The chart below reveals how peaks in the Money Supply to Savings ratio for the U.S. economy regularly are associated with the end of crack-up booms (bull market in stocks) and the onset of deflationary bust (bear market in stocks).

NQ Guideline For Thursday

On Wednesday NQ opened with a gap-up and then slowly rally into resistance but did not break above 5783 resistance until the end of the day.

 

NQ close at the day high, which is the location of the next key resistance zone 5795-5800 area, the 20-day moving average on the daily chart.

 

If NQ can opened with a gap-up above 5785-5800 resistance zone in the morning on Thursday then NQ should continue to rally until the next resistance zone at 5860.

 

Should NQ opened below 5800 on Thursday morning it is likely to need a pullback before attempting to break above 5800 resistance. Support on a pullback-down will be 5775.

NQ Guideline For Wednesday

NQ retested 5783 resistance again on Tuesday and failed to break through it. NQ then traded down in a choppy price action towards 5720-5730 support zone.

 

Although the low of the day on Tuesday remained above support, NQ has now traded down to support in afterhours trading, setting up a possible break below 5720. If so, selling should quickly tank NQ down to retest the recent low 5643.

 

Key price level for NQ on Wednesday will be 5720.

-- If NQ opened below 5720 on Wednesday it is likely to trigger a cascade of selling that could quickly tank NQ down towards 5643 support. It would need a very bearish market condition for NQ to break below 5643 support.

-- If NQ remains above 5720 by the opening below Wednesday it could lead to a sideways action, resistance is again 5783

 

Central Bank Asset Purchases

NQ Guideline For Tuesday

Massive overnight buying programs on Sunday night continue into the morning, and by the opening bell NQ opened with a hug gap-up designed to force the short sellers to cover.

 

Soon after the open, NQ rallied up to strong resistance, around 5783 area, the location of both the double-top resistance and the resistance at the 20-day moving average on the daily chart.

 

5783 will be the location of the key price level on Tuesday, and as of the close on Monday, it was still acting as resistance.

 

Without a gap-up open above 5783 on Tuesday NQ may have to pullback down to support before attempting to break above 5783 resistance.

 

Key support zone for NQ on Tuesday will be 5720-5730 area.

 

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Jack Ablin says investors have been encouraged to take on risk due to the trillions of dollars being pumped into the system by central banks.

NQ Guideline For Monday

NQ traded sideways in a narrow trading range on Friday as it remained stuck between 5720 resistance and 5640 support. Remaining inside the 5640-5720 trading range is an indication NQ is going to continue to trade sideways in a narrow trading range.

 

On Monday NQ should break out of the 5640 - 5720 trading range. If so we should see a strong move in the direction of the break.

 

On the daily chart NQ looks ready to tank below 5640 support. A break should cause a sharp decline to the lower support levels, 5480 then 5450.

 

However, if the Fed triggers large buy programs we could see NQ rally above 5720 to its next resistance at 5780.

NQ Guideline For Friday

NQ opened with a huge gap-down on Thursday morning and after dropping down to double-bottom and 50-day moving average (on daily chart) support in the first hour of trading.

 

NQ bounce off key support level, 5640, reversed and then rally all day into the close, closing at the day high and just below its key resistance, the 200-moving average on the 5-minute chart, setting up a potential rally day on Friday, or a big selloff day on Friday.

 

Key intraday inflection price level for NQ on Friday is 5720.

-- If NQ can trade4 back above 5720 short-covering should catapult NQ up to 5780 resistance before falling back down

-- Failure to break-back above 5720 is going to attract heavy selling, downside target is a retest of Thursday low of 5640. Should that break we could see a repeat of last week Friday sharp selling, next support is 5450 to 5480

 

Yield Curve continues to flatten. An inverted yield curve will guarantee a recession.

NQ Guideline For Thursday

NQ sold off hard after the Fed announced their policy decision at the end of their two days meeting but the end of the day buy program pushed NQ back to close above key price level, 5720.

 

Although NQ closed above key support price level of 5720 it closed negative for the day on Wednesday, thus setting up a strong selling down day for Thursday. Because the stock market is heavily manipulated by the Fed, anything is possible on Thursday

 

-- If NQ can stay above 5720 selling should remains under control. If so, NQ either trade sideways or rally.

-- However, if NQ get pushed back down below 5720, selling could get out of control. The first downside target is a retest of last week Friday swing low of 5643, and the location of its current 50-day moving average on the daily chart. That level should serve as a strong support level, so a clear break could trigger massive algorithm selling, and tank it down hard.

 

NQ Guideline For Wednesday

FOMC Policy Announcement On Wednesday Afternoon

NQ traded sideways on Tuesday, ahead of the FOMC policy decision announcement on Wednesday afternoon. With the markets totally under central banks control, anything is possible on Wednesday.

 

The Fed is certain to trigger buy programs, however, whether or not the market is going to rally big is yet to be seen. it will depends very much on how much selling occurs after the FOMC announces their .25% point interest rate rise, and the language regarding their plan to reduce their balance sheet.

 

If NQ selling that started last week Friday is still in progress NQ should tank hard again on Wednesday. failure to do so is an indication NQ is going to rally up to retest its recent swing high

 

Key inflection price level for NQ on Wednesday will be 5720, acting as support at the close on Tuesday.

NQ Guideline For Tuesday

After a vary large down day last Friday it is to be expect that NQ is going to consolidate on Monday and likely on Tuesday and also likely on Wednesday at least until the FOMC announces their policy decision on Wednesday afternoon.

 

The FOMC is expected to raise its Fed fund rate by 0.25% and there is really no reason for them not to raise interest rate. However, if they do not raise rate as expected the markets could get out of control.

 

On Monday NQ dropped down to its 50-day moving average on the daily chart before bouncing and trade sideways all day on Monday.

 

Key support for NQ is 5625 (50-DMA on daily chart), key resistance is 5736.

-- A sustained break out of the range can cause a strong move in the direction of the break.

-- A false break out of the range or remaining inside the range implies continuing consolidation.

 

FOMC meeting begins on Tuesday