NQ Guideline For Thursday

The FOMC ended their two day policy meeting with a hawkish tone. Even with the Fed hawkish tone, the US dollar failed to mount any rally, as the dollar continued to consolidate it recent huge decline.

 

The US stock market and bond market failed to rally as capital continue t flee the dollar assets. The decline has just started. The equity market would need to drop much further from the current level to starts to trigger liquidation of the long position.

 

On the short term time frame, key inflection price level for NQ is 6970, bullish above, bearish below

 

The yield on  US 10-Year Treasury bond.has just broken above the trendline that has guided it lower for the last 25 years.

 

NQ Guideline For Wednesday

With capital fleeing the US dollar asset, on Tuesday the stock market opened with a huge gap-down and it did not recover, as the Dow close down with almost 300 points. The pattern should continue unless the Fed is willing to buy out everything that was sold.

For NQ on Wednesday, key resistance is 6980. As long as NQ remains below 6980 NQ would remains udder selling pressure, and selling could come at any time as investors continue to dump the US dollar assets.

 

NQ Guideline For Tuesday

The Dow Jones Industrial Average dropped about 177 points on Monday with mainstream media blaming it on rising bond yield. The true culprit is the outflow of capital from the US dollar asset before the US dollar collapses even further.

 

The outflow is just at the initial stage. The stage is set for a 1987-style stock market crash as investors flee the US dollar asset.

 

 

Critical short term support for NQ on Tuesday will be 6980.

-- Breaking below 6980 could trigger a cascade of selling, With everyone now long the market there is no more buyer, thus selling could get out of control.

-- With NQ futures pointing to a huge gap-down at the open, NQ would need to get back above 6980 to keep selling at bay and under control.

NQ Guideline For Monday

With the equity market clearly in blow-off phase the market rallied strongly on Friday following just two day of sideways consolidation.

 

With the equity market now in blow-off phase, absent any major negative catalyst the equity market should continue to rally on Monday.

NQ Guideline For Friday

NQ traded sideways on Thursday as it remained inside prior day trading range the entire day.

 

Friday may be a repeat of Thursday's price action as traders balances their books for the weekend, unless the market gets some unexpected surprise comments from those meeting in Davos.

 

Inflection price level for NQ remains at 6950.

NQ Guideline For Thursday

Trump Team at Davos Backs Weaker US Dollar, Sharpens Trade War Talk

A day before Trump’s scheduled arrival in the Swiss ski resort of Davos for the World Economic Forum’s annual meeting, American Treasury Secretary Steven Mnuchin endorsed the dollar’s decline as a benefit to the American economy

China will likely fight back, devaluing their currency to make their exports cheaper to foreign buyers. In this environment, Eurozone countries may respond in kind

The US dollar index futures USDX dropped decisively below key 90 technical support level today, setting a stage for a rapid decline towards the 70 level.

 

US dollar weakness dragged down the equity market on Thursday as capital may have started to flee the US market, with NQ dropping down over 100 points in the morning before recovering some of the losses in the afternoon.

 

James baker was the last US Treasury Secretary that vocally wanted a weaker dollar, just before the 1987 stock market crash, the Black Monday.

 

Key inflection price level for NQ on Thursday will be 6950, bullish above, bearish below

 

NQ Guideline For Wednesday

Another engineered up day in the stock market on Tuesday. The market should continued to be engineered higher especially with bankers annual meeting happening in Davos this week.

Unless unexpected market moving news hit the market, and as long as support does not get violated, any pullback down move should be bought,

NQ Guideline For Tuesday

The stock market was engineered to rally for the government funding agreement. Buy programs was triggered soon after the open and continued all day into the close.

 

With the Fed certain to want to project a positive spin on the funding agreement, buy programs should continue a while longer.

 

Whether or not Tuesday will be another large rally day would depends on whether or not they are going to trigger another large buy programs, without which, we could expect a sideways consolidation type of day on Tuesday.

NQ Guideline For Monday

As usual, the stock market traded sideways on Friday with NQ remaining above key support all day

 

The Fed may wish to continue to aggressively support the stock market on Monday due to the government funding negotiation show in Washington DC

 

As long the market remains above key support level, selling should remains under control, for NQ key support is 6825.

NQ Guideline For Friday

NQ traded sideways in a narrow trading range on Thursday clearly showing that the rally has lost momentum, and may be ready to pullback down.

 

Whether or not it is the start of a bear market, it is difficult to say at this time because we need to see more evidence, and also because topping pattern takes some time to form.

 

On the short term intraday timeframe however, key support for NQ on Friday will be 6800.

-- As long as NQ can stay above 6800, selling should remains under control, and NQ is likely to simply trade sideways because Friday tend to be a choppy sideways type of day. However, the Fed buy programs can get triggered at any time, so we must also on the lookout for huge rally.

-- Breaking below 6800 could run-over stop-losses, and with everyone on the long side, and no buyers, selling could get intense, with some potential support at 6730.

 

Bitcoin continued to trade sideways above support on Thursday, and as long the recent low is not violated bitcoin price should stabilized here before resuming its up-trending mode

 

NQ Guideline For Thursday

As expected, trend in a blow-off phase should not pullback for more than one day before resuming the trend.

 

The Dow, S&P 500 and Nasdaq are all in blow-off phase. And so it did on Wednesday after pulling back down for one day on Tuesday NQ rallied back up on Wednesday.

 

Short term key support for NQ on Thursday is now at 6790.

-- And as long as NQ remains above 6790 the rally should continue to another higher high, breaking above Tuesday swing high for NQ before profit-taking could potentially push it back down.

-- Should NQ trade below 6790 on Thursday, selling could come back in.

 

Cryptocurrencies continues to be under attack by central banks.

NQ Guideline For Wednesday

A pullback down day in the equity market on Tuesday. However, with the market now in a blow-off phase it might be just a one day pullback as the fed continues to support the market in order to keep the bubble going ahead of the midterm election.

 

Key price level for NQ going into Wednesday trading is 6770.

-- If they can push NQ back above 6770 overnight and keep it above 6770 by the opening bell NQ should resume its rally into another new high.

-- Should they fail and NQ opened below 6770 there could be more selling. And with everyone on the long side selling could get out of control as margin call gets triggered. The next strong support is not until 6600, and NQ could get down there very quickly.

 

Cryptocurrencies continues to be under attack and pullback may not be over until mid-February

 

NQ Guideline For Tuesday

The stock market was closed on Monday for the Marin Luther King's holidays and will reopened on Tuesday.

NQ rallied on Friday ahead of the long weekend. With the Fed still increasing their balance sheet contrary to their pubic pronouncement the stock market should continue to rally a bit longer unless he market get some unexpected negative news.

Gold continues to rally and the US dollar continues to tank

NQ Guideline For Friday

On Thursday NQ opened above the short term inflection price level which was 6680, then after spending the entire morning trading sideways in a very narrow range just above 6680, they eventually were above to rally NQ up into another higher high in the afternoon, but it was a real struggle, without much momentum.

 

Inflection price level for NQ on Friday will be 6707.

-- If NQ can stay above 6707 by the opening bell, it has a good chance of rallying into another higher high as sellers may not be very active above 6707

-- Trading back below 6707 however implies a likely sideways consolidation price action with first support at 6680.

NQ Guideline For Thursday

A small pullback day in the equity market on Wednesday. NQ opened with a gap-down below support and after dropping down in the early trading, NQ quickly reversed back up and rallied back to just under resistance.

 

Which direction NQ will go on Thursday will depend on where it trades in relation to its key inflection price level, which for Thursday will be again at 6680.

-- Trading above 6680 implies NQ is resuming its uptrend. If so the next target up is a break above its recent high. Possible target are 5730-5750.

-- Failure to break back above 6680 is an indication NQ may have to pullback down further. If that is the case, the next possible downside target 6620

NQ Guidline For Wedneday

NQ traded sideways in a narrow range on Tuesday, setting up for another rally day if it can stay above key support, or pullback down deeper if it breaks below key support.

 

For Wednesday NQ intraday short term key support is 6680.

-- Staying above 6680 impales either more sideways consolidation or rally on Wednesday

-- Breaking below 6680 however indicated more downside move. If so lower supports are 6655 then 6640.

NQ Guideline For Tuesday

The stock market is now in a capitulation phase. Engineered buy programs seems to be non-stop until most of the short sellers has capitulated and exited their short position.

When will the engineered rally ends, it is very difficult to say as the market is now driven up purely by emotion, greed, so we will continue to stay with the current uptrend until there is sign the trend is ending.

Keep in mind that trend in capitulation mode such as the current up trending move, can end abruptly and reverse sharply, so we must stay nimble.

Key support level for NQ on Tuesday will be 6655.
-- As long as NQ remains above 6655, it either consolidates sideways or rally to another higher high

NQ Guideline For Monday

After a narrow range consolidation day on Thursday NQ rallied huge again on Friday.

 

An engineered rally design to keep the economy from going into recession ahead of the US midterm election might have happened too fast too soon, and in fact, may backfire on the republican come election day towards the end of 2018.

 

We can see the US dollar weakens, precious metals and crypto currencies rallying and other commodities rallying as well, always a tell tale sign the Fed is printing up dollars to push the stock market up.

With a very manipulated market, and much more liquidity injection coming into the stock market to keep the rally going, it is difficult to forecast when it will end.

 

On the short term intraday timeframe, however, inflection price level for NQ on Monday will be 6650.

-- As long as NQ remains above 6650 the rally may continue without a pullback down move.

-- Breaking back below 6650 implies a pullback down consolidation move. Downside supports are 6640 and 6615.

NQ Guideline For Thursday

NQ rally for the second day in a row on Wednesday breaking above prior swing high, setting up either a continual rally, or a pullback down mode.

 

Key price level to watch for now is 6540. As long as NQ remains above 6540, selling should remains under control. Breaking back below 6540 is bearish, and likely to break heavy selling pressure, even if just temporarily.

 

On the short term time frame key price level for Thursday is 6580

-- If NQ can stay above 6580 on Thursday, rally should continue.

-- Breaking back below 6580 implies NQ is pulling back down and consolidating, with support at 6540.

NQ Guideline For Wednesday

The Fed buy programs targeted the tech stocks on Tuesday in order to manipulate sentiments especially because the annual Santa Rally never showed up as the equity market were selling off in the last two weeks on December.

 

NQ opened with a gap-up and buy programs were ready to trigger immediately. Although NQ managed to rally big in the morning there was no follow-up buying as NQ simply traded sideways for most of the day. Both the S&P 500 and the Dow were mildly bullish on Tuesday

 

They may trigger another large buy programs on Wednesday. If so NQ should rally again. However, without a large buy programs, NQ may simply trades sideways or pullback down.

 

Key support now for NQ on Wednesday is at 6470. As long as NQ remains above 6470 selling should remains under control.

Again, big rally for gold on Tuesday

NQ Guideline For Tuesday

After making a higher high by mid-December 2017 NQ drifted lower into the end of the year, finally breaking below key breakout price level, 6435 on Friday, the last trading day of 2017, triggering a massive algorithm selling program.

 

With the first two trading day of the new year tending to be bullish, failure to do so sets up a bearish January and February as investors takes profit.

 

On Tuesday, unless NQ can break back above 6435, selling should continue, and the next strong support is not until 6345.