NQ traded sideways on Friday, the usual Friday pattern, trading between support and resistance.
Key indicator to watch for on Monday will be the 10-year treasury yield of 1.50% and NQ price level of 12,950.
If 10-year treasury yield can stay below 1.50% and NQ can trade above 12,950, we should see NQ rallying up to 13,200 as first upside target.
Below 12,950, we could see another down day for NQ, especially if we see a spike of the 10-year treasury rate above 1.50%.
The stock market tanked very hard on Thursday as the 10-year treasury yield spiked above 1.50% critical algos trigger level.
Going forward, this pattern will continue, massive selling in the equity market when yield spike above 1.5%. regardless of where the support is, and massive buying when yield drop back below the 1.50% critical level..
The 5-year treasury yield level of 0.75% is also is also very important. Thus, for Friday, watch the 10-years yield key level of 1.50% and the 5-year treasury yield of 0.75%.
Bullish market when yield is below those critical threshold, and bearish stock market when the yields are above those levels, and will not respect support or resistance level.
Wednesday was day 7 on the current downtrend that started on February 16th, and it was a reversal day, a huge rally day..
At the close NQ was trading above minor resistance, and set to trend up to the next resistance at 13,400 followed by stronger resistance at 13,500. With a lot of shorts having to cover, NQ could easily break above 13,400.
However, the key indicator to watch is the 10-year treasury yield. As long as the 10-year treasury yield does not spike above 1.5% overnight, we should see short-covering pushing the equity market higher in the morning on Thursday. Should the yield spike above 1.5% we could see massive selling come Thursday morning.
NQ next upside target is between 13,400 to 13,500, which will be key resistance going forward. Key support is at 13,120
Massive selling in NQ stocks on Monday as the 10-year treasury yield pushes higher towards the critical 1.50% key level, a level where many algos would start triggering selling programs in the equity market that the Fed may not be able to control.
On Monday with the open clearly below its 20-moving average on the daily chart, and is heading down to the 50-moving average on the daily chart, at around 13,000-13,100 price zone.
As long as the 10-year treasury yield does not breakout above 1.50% level, 13,000 should provide temporary support for NQ
Should 13,000 support clearly break we could see another round of selling
After trending down sharply starting at midday on Friday NQ traded sideways (bear flag pattern) into the close. setting up a sharp selling on Monday, as long as NQ does not breakout to the upside above 13,650..
Key price level for NQ on Monday will be at 13,650. NQ would need to trade above 13,650 to change the trend from down to up, with key support at 13,540.
If NQ breaks and stays below 13,540 we could see NQ dropping down sharply, with the next support at 13,400. It is a strong support, but with so many trailing stop-losses just below 13,450, there is a high probability that 13,400 support would not hold. A bearish sign would be a spike in the VIX volatility index.
Another strong decline for NQ on Thursday morning but reversed and trend up all day into the close. Friday may be likely to be a sideways pattern as usual.
How it trades in the morning would depends on where it opens in relation to its line-in-the-sand for Friday, 13,600, bullish above, bearis below but look for it to be a sideways trading day, unless it breaks out of the range, with resistance at 13,720-13,740 and support at 13,500.
Massive spike in 10-year treasury rates spooked small cap stocks, triggering huge gap-down open in Nasday NQ. It continued to sold-off until the Fed were above to pushed the treasury yield down.
The decline in the 10-year yield looks choppy, and could set up another surge in yield. Breaking above 1.50% could crash the stock market particularly stocks in Russell 2000 and Nasdaq indexes.
NQ sold off hard in the morning on Wednesday, then rally when treasury yield started to decline. The inverse correlation between yield and stocks should continue. Rising yield is bearish and falling yield is bullish.
Key level for NQ on Thursday will be at 13,750, now resistance, and wil turn into support on a clear and sustained break above it.
On Tuesday NQ opened with a gap-up above Friday close, then after closing the gap, rallies back up in A-B-C wave pattern before reversing and dropping back down to key support.
NQ spent the rest of the afternoon trading sideways consolidating the large decline, usually implies a continuation after the consolidation has ended, whicm means we should get anothe down leg on Wednesday.
NQ intraday pattern on the 5-minute chart looks like it could rally on Wednesday simply because 13,740 support seems to be holding up quite well. To rally however, NQ has to stay above Tuesday low, which is key support for Wednesday, and then break above 13,800 to run-over trailing stop-losses for the shorts.
Failure to do that sets up a large decline especially if NQ can break below Tuesday low, 13,720 and continue lower.
The equity market was closed on Monday. When the market closed on Friday, there was a short-squeezed at the end of the day.
With NQ now in overbought territory on the intraday 5-minute chart at the close on Friday, it is possible we could see a profit-taking pullabck selling on Tuesday morning. As long as profit-taking selling does not break below key support, which on Tuesday will be at 13,740-13,750 zone, NQ should rally back up.
Should NQ clearly break below 13,730, we could see heavy selling, with supports at 13,600-13,650.
NQ traded sideways on Thursday between 13,620 support and 13,740 resistance,
On Friday, unless there is a market moving news released before the open, we could see NQ remaining within the range between 13,620 support and 13,740 resistance. It may also be possible for NQ to trade outside the range, and then reverse back in.
NQ would need to clearly trade outside the range, and remains outside the range to trigger a trending moves out of the range.
If so, a breakout above 13,740 could move up to the nest upside target of 13,840. A break below 13620 will target a move down to 13,500-13,520 support zone
NQ opened with a gap-up on Wednesday then large sell program hit the market, tanking NQ hard, breaking below key intra-day support, which caused more selling.
After selling stopped, NQ then reversed and spent most of the day rallying back up into the middle of the range, setting up either
1). A rally to higher high above Wednesday swing high, if it trades above key line-in-the-sand on Thursday, above 13,660, or
2) Drop back down to retest Wednesday swing low on Thursday if NQ should trade below key line-in-the-sand, 13,660. Should Wednesday low gets broken, we could potentially see a large liquidation decline.
A narrow range sideways trading pattern for NQ on Tuesday, with a slightly bullish pattern. Key line-in-the-sand for NQ on Wednesday wil be at 13,660. Above 13,660 NQ would continue to remains in a bullish mode.
Should it drop below 13,660 and remains below it, we could see a sharp selling, with support at 13,550-13,600
NQ traded sideways above priuor swing high on Monday. Unless, NW can break back below 13,600, the shorts may starts to cover. If so we could see a large trending move to the upside.
A break back below 13,600 could start to run-over trailing stoplosses for the longs, thus could trigger heavy selling.
On the intraday 5-min chart, key line-in-the-sand for Tuesday will be at 13,640, bullish above it. However, overbought conditions could still cause a profit-taking pb down, but general trend will remains bullish.
A sideways type of day for NQ on Friday, with pullback decline i9n the morning followed by a rally, then another pullback down move in the afternoon.With a close right at prior swing high in January, NQ could either trend up all day on Monday if the shorts decides to cover, or breakout above prior swing high and then reverse if profit-taking gets too much.
As such, a good line-in-the-sand to for Monday trading is January swing high at around 13,600. If NQ can breakout above it and then stay above it, we could see an all day short-covering with a realistic next upside target at 13,750-13,800, but it can go higher.
Breaking back below 13,600 after trading above it can trigger a sharp and relentless reversal back down as trailing stop-losses get run over..
On Thursday NQ opened with a gap-up, thus setting up a bullish day. After a brief choppy pullback down moves in the morning, NQ resume its rally, trading above Wednesday swing high. The end of day rally was pushing into overbought zone, setting up a rally day on Friday.
However, to do so, with the end of day rally pushing into overbought zone, NQ may have to pullback down first before rallying, unless of course NQ would break above the high from January 27th, and triggers massive short-covering, overwhelming selling pressure.
Key support on Friday will be at 13,500
On Wednesday NQ opened with a gap-up and then reversed down immediately, and trend down all day with a close at the low of the day, at key support level.
On Thursday, key support level would be at Wednesday swing low, 13,380. Opening and trading below it could cause a large decline, with the next support at 13,000-13,040, and if that support breaks, the next support below that is 13,200
Above 13,380, we could see another higher high above Wednesday swing high.
Another breakout day for NQ on Tuesday. From the low on January 29, it has now rallied 5-waves up. It can still continue higher, until wave 5 ends. Many wave 5 rally ends with a gap-up then reverse back down, such as the price action on January 25.
Key line-in-the-sand for NQ on Monday morning will be at 13,480, bullish above it with 13,600 as possible resistance.
Bearish below it with 13,300 as possible target down.
On Monday NQ opened with a huge gap-up above key line-in-the-sand. After a quick pullback down to support, it then rallied all morning and into lunch before consolidating the huge morning rally, spending the rest of the day trading sideways..
NQ is now in between resistance at 13,280, and support at 13,100. It may trade inside the range for a while before breaking out of the 13,100-13,280 trading range.
At the end of the day on Monday NQ looks set to trend back up again. However, it may need to pullback down to 13,100 support before rallying back up again.
There is a good chance that 13,100 support may not hold on Tuesday. If so, we can see a resumption of a sharp downtrend. If support hold, we could see another rally day on Tuesday.
