Market Guideline For Thuirsday

Another pullback down day in the stock market on Wednesday, a second down day in a row. The market should now rally on Thursday, the third pullback day, a continuation of the uptrend.

 

Should the rally not materializes on Thursday the market sentiment will turn negative, and a selloff from lower high could be fast on a break below support, as trailing stop-losses get triggered.

 

Key support for NQ on Thursday will be 6885.

-- As long as 6885 is not clearly violated NQ either trend up or trade sideways in a consolidation patter.

-- Clearly breaking below 6885 is bearish, if so the next strong support is not until 6700.

NQ Guideline For Wednesday

A down day in the stock market on Tuesday even as the new Fed Chairman testified before congress.

On Monday, NQ rallied to just below its recent record high. Then sold off on Tuesday without first breaking above its recent high, a bearish sign if the decline continued.

 

With no meaningful support until 6700 the decline could get ugly if it continue lower on Wednesday

 

Strong support is 6700 and key resistance to break is its recent high at 7030

NQ Guideline for Tuesday

With all the major stock indices now clearly trading above their respective 50-day moving average on the daily chart the rally should continues short has too cover their position fueling the rally.

 

The next upside target for all the three indices, the Dow the S&P 500 and the NQ, is a break above their respective prior swing high on the daily chart before a large pullback is to be expected.

 

The only caveat is the 10-year bond yield. As long as the 10-year bond yield continue to decline, and remains below 3%, the rally should continue.

 

NQ Guideline For Monday

Going forward, with both the Dow and the S&P 500 still trading below their respective key 50-day moving average, the stock market is still vulnerable;e to a sharp sell-off.

 

NQ was trading well above its 50-day moving average, rallied in a big way on Friday. Should the Dow and the S&P breaks above their respective resistance, NQ should explodes higher 

 

A break above their respective resistance zone should also cause a sharp rally for the Dow and the S&P as those holding short position in the market would be forced to cover their position fueling the rally.

 

The Fed buying algorithm is fully aware of that and thus very likely to do whatever it takes to push the market above resistance.

 

On Monday, first support for NQ is 6860.

-- Any decline to it is likely to be bought. A break below implies larger decline.

NQ Guideline For Friday

With both the Dow and S&P 500 index remaining below key resistance but NQ remains above key support the stock market simply traded sideways in a choppy pattern.

 

This type of choppy price action should continue unless either the Dow and S&P breaks above key resistance, or NQ breaks down below support.

 

Key stock market driver remains the 10-year treasury yield, now remaining above 2.9%. A rally in yield triggers selling and a decline in yield triggers buying algos..

NQ Guideline For Thursday

On Wednesday, with the Dow and the S&P 500 Futures contract remaining below key resistance, unable to break above, they then dropped back down to close negative for the day, a down day.

 

NQ remained above key support, although it was dragged down by the Dow and the S&P 500 as it sold off hard into the close.

 

The stage is set for a strong decline going forward unless the Fed buying algorithm came in to the rescue. The lower the market go the heavier the selling will become, creating a negative feedback loop that can cause a crash.

 

The 1987-style crash scenario is still very much in play as short volatility trades are forced to unwind if the stock market continue to go lower.

 

Key support for NQ on Thursday will be 6675.

-- With both the Dow and the S&P 500 futures below their resistance, NQ breaking below support is very negative for the overall market.

NQ Guideline For Wednesday

Dragged down by Walmart disappointing earning report, the Dow and S&P 500 dropped down from resistance on Tuesday while NQ remained above support.

The Dow and the S&P 500 needs to clearly break above resistance very soon if they are going to keep heavy selling away as failure to do so is likely to attract heavy selling pressure that can tank the stock market back down to its recent low.

 

As for NQ, as long a it remains above support, now at 6600, selling should remains under control, particularly if the Fed buying algorithm continues to target the Apple stock.

NQ Guideline For Tuesday

Last week, with the stock market artificially engineered higher for the long weekend, both the S&P 500 and the Dow rallied back up to key resistance, closing the week just below resistance. 

 

Gong forward, a break above resistance implies a quick move back up to retest prior swing high. However, failure to clearly break back above resistance would send the market tanking back down to test the recent low.

 

Key resistance price zones for Dow Futures is around 25,250 and 2750 for S&P 500 Futures. NQ has broken above key resistance 6600 which now acting as support.

 

Tuesday's price action in the stock market could be key to the direction, up or down, of the stock market over the next weeks or so.

NQ Guideline For Friday

On Thursday, ahead of the long weekend, the PPT targeted Apple shared to buy, rocketing nasdaq upward.

With international capital continuing to flee US dollar asset we saw the Dow lagging on Thursday and US dollar tanking, ready to crash through prior low after a successful retest of breakdown level.

 

The PPT is likely to continue to buy the stock market on Friday. If so we can expect the stock amrket to continue to rally as long as there is not much selling pressure, the US dollar to crash through prior swing low as they continue to flood the market with liquidity, with gold and crude oil rallying as inflation fears continues to intensify

NQ Guidelien For Thursday

With treasury bond yield spiking, inflation spiking and dollar collapsing as international capital continues to stampede out of the US dollar, which can easily trigger market meltdown, the Plunge Protection Team is busy at work as they continue to buy the stock market, pushing it up, especially ahead of the long weekend.

 

Whether or not selling can overwhelm buying as capital continues to flee the US dollar asset, only time will tell. The key threshold for the 10-year treasury yield is around 3%. A spike above 3% is likely to trigger massive algorithm sell programs as investment strategies, caught on the wrong side, is forced to unwind their losing trades.

 

On Wednesday the 10-year treasury bond yield spiked to a high of 2.928

 

Both the Dow and the S&P 500 remains below their respective key 50-DMA resistance, further rally towards those price level is certain to encounter heavy selling.

 

Next resistance for NQ is 6750

 

10-year treasury bond yield has broken above and then retested its downtrend line, setting up a massive spikes in yield. Chart below is from Double Line

NQ Guideline For Tuesday

The stock market continued its rally which started last Friday when the S&P 500 dropped down to strong support at its 200-day moving average on the daily chart, and the Dow and Nasdaq dropped down to just above their respective 200-DMA support.

 

With all the three major indices, the Dow, the S&P 500 and the Nasdaq NQ still trading below its key resistance on Monday, we should see continuing rally into resistance on Tuesday before selling comes back in.

 

Tuesday resistance for NQ is 6600

 

Failure to rally to resistance is an indication of severe market weakness. With many investors buying the recent decline, a break-back down lower could cause an avalanche of selling, triggering a crash scenario as buyers get run-over from forced margin selling.

 

With so much damage done to the market during its recent crash, the stage is set for a 1987-style crash.

 

 

NQ Guideline For Monday

A massive selloff in the equity market on Friday morning with the S&P 500 dropping down to its key 200-day moving average on the daily chart, where short-sellers covered their short position to lock in their massive profit and reversed long ahead of the weekend.

 

A huge rally in the afternoon with the main indices closing in the middle of their range between support and resistance.

 

With Friday low for the Dow and Nasdaq 100 still above their respective 200-DMA support on their daily chart, on Monday, the stock market can still go either way, down to retest the low and support, or up to retest resistance,.

 

For NQ on Monday the key inflection price level is 6450.

-- Staying above 6450 is likely to generate more short-covering with upside target at 6720 key resistance level on the daily chart.

-- Trading back below 6450 is going to attack new selling, with downside target and support at its 200-day moving average on the daily chart.

Friday Trading Guideline

The major stock market indices dropped down from resistance on Wednesday then continued selling off on Thursday.

 

Whether or not the equity market needs to consolidate the large decline on Thursday is anyone guess, but the stage is set for the market to plunges lower to the next support at their respective 200-day moving average, either Friday or early next week.

 

The stock market remains in crash mode going into Friday.

NQ Guideline For Thursday

Wild trading actions in the equity market on Wednesday with the three main stock indices, the Dow, the S&P 500 and the Nasdaq 100 all rallied into their respective 50-day Moving Average resistance on the daily chart, and then dropped down from there, indicating heavy selling by the algos at resistance.

 

Those price levels, 25,100 for Dow Futures, 2725 for the S&P 500 Futures, and 6,600 for NQ Futures. will be key price level going into Thursday and Friday trading sessions.

-- As long as those price level is not clearly violated to the upside, selling pressure should continue to intensify.

 

There will be wild trading actions as Plunge Protection Team will be actively supporting the stock market selloff.

Market Guideline For Wednesday

Massive intervention by central banks to support the market help the stock market bounced from an extreme oversold market condition on Tuesday. With global capital continuing to stampede out of the US dollar assets, the stage is set for a sustained bear market decline.

On the short term intraday time frame, on Wednesday if the market is still in crash mode it should tank again on Wednesday to retest the low and it the recent swing low does not hold, a bigger crash is a real possibility.

 

However, if central banks are able to keep the market going up on Wednesday the next liquidation decline has been delayed.

 

Key inflection price level for NQ on Wednesday will be 6650.

-- If they can push NQ back above 6650, selling should be under control until it rally back up to the next resistance, which is at 6850.

-- Below 6650 for NQ implies the stock market selloff should continue

NQ Guideline for Tuesday

The stock market crashed on Monday. US futures point to another weak open on Tuesday but central banks may step in to halt the collapse. If so we can see a wild trading on Tuesday.

At the opening bell however, there will be massive margin call liquidation selling, and if central banks does not intervene aggressively right away margin selling could lead to a bigger crash than Monday's selloff before it can bounce.

 

NQ strong support is at 6000, which is about 400 points lower than Monday's close. Strong support for the Dow is at 21,000, that is about 2,500 points lower than Monday's close, although there are several support levels along the way down to 21,000.

 

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NQ Guideline For Monday

A sharp selloff in the equity market on Friday as capital continued to flee the US dollar assets, stocks and bonds, in anticipation of a sustained decline of the US dollar.

 

With major support for NQ sill quite a bit lower, not until 6600, the stage is set for another round of liquidation decline, with or without a consolidation day.

 

On the short term intraday timeframe however, key price level to watch for on Monday will be 6820.

-- If NQ can stay above 6820 profit-taking activities could NQ from collapsing, should trigger a sideways consolidation pattern.

-- Selling could come back if NQ remains below 6820.