Guideline For Friday

A pullback down day on Thursday. A clear break below 3780 for NQ in the afternoon triggered algorithm selling running over stoploss bt late day buying pushed NQ back up to retest its morning low, closing just below previous trading range support, now will act as resistance. 

Key price zone for Friday is 3780 area.

-- As long as NQ stays below 3780 it is either going to trade sideways or down on Friday.

-- A sustained break above 3780 is an indication NQ is going to re-test the preious trading range resistance at 3805.

Guideline For Thursday

Another sideways choppy trading action on Wednesday, the fourth day in a row trading inside a narrow trading range between 3780 and 3805. NQ is setup up for either more consolidation inside the range or a pullback down day, but I will not discount a breakout to the upside as well.

Key price levels are 3780 support and 3805 resistance.

-- A clear break below 3780 could trigger some kind of a stoploss selling but it may not be a very large drop because strong support resides at 3740 area.

-- A break above 3805 may trigger another round of short-covering rally but it would likely be a slow and choppy rally because there is not more buyers at this level, as the only buyers are the Fed buying though their proxy.

Guideline For Wednesday

As expected the market remained in a choppy narrow-range trading pattern on Tuesday, simply because there is no more buyers left to buy, as everyone who wants to buy are now fully invested in the market.

Since the only buyers left are the FED proxy buyers, the choppy narrow-range trading condition should continue until we have a larger pullback, and we cannot get any larger pullback unless the market can break below support and trigger some stoploss selling.

Inflection price zone for Wednesday is 3795 for NQ.
-- Trading above 3795 has a bullish bias, an indication that NQ may continue to rally in a very slow choppy way.
-- Trading below 3795 implies a potential pullback, and the next support is 3775.

Negative Interest Rate Policy (NIRP) is a back-door QE by the ECB
 

Guideline For Tuesday

With a historic low volatility (low vix) NQ traded sideways in a choppy narrow trading range on Monday. By the end of the day on Monday it looks ready for a relatively larger pullback down on the 60-minute chart. 

Key price level on Tuesday is 3795.

-- Trading below 3795 is an indication that the 60-minute pullback down is already in progress, but with vix at a very low level I am not looking for a large move down.

-- Trading above 3795 implies the uptrend is still in progress, next upside target is a hgher high above Monday swing high.

Guideline For Monday

Friday was a narrow-range uptrending day. With the European Central Bank ECB now engaging in massive back door money-printing in order to prevent inevitable collapse, the newly created money has to find places to invest, and it may continue to go into the stock market. But how much higher can the stock market is going to go to before it collapses, is anyone's guess. 

However, for us traders, as long as the trend is up on the 60-minute and the daily chart, we should continue to buy pullbacks until at least the trend on the 60-minute chart indicates a pullback.

For Monday key support for NQ is 3780.

-- As long as pullback does not clearly violates 3780 look for NQ to make another higher high, but keep in mind that 3800 is a whole number resistance, which may or may not get broken on the first attempt to push above it.

-- Clearly breaking below 3780 is an indication that the NQ may be going into a pullback mode.

Guideline For Friday

The stock market rallied strongly after the ECB announced a negative interest rate policy on Thursday in order to force banks to lend. As goverments get more desperate, and in order to delay the inevitable collapse, the negative interest rate regime should also come to the US in not too distance future.

Along with the announcement, it was very likely the ECB and the Fed would have triggered most of the buy programs in the stock market in order to make the announcement looks good. 

Market sentiment is now in extreme bullish zone and primed for a trend reversal on the daily, weekly and monthly chart, all it needs now is a catalyst. What that catalyst will be, and when, there is no way to know. The market often reverses when no one is expecting it.

For Friday, unless the Fed came in with more buy programs, look for the market to consolidate Thursday's large up move. 

Key price level for NQ on Friday is 3775.

-- Above 3775 implies the uptrend is continuing, next upside target is 3800.

-- Below 3775 is an indication NQ is going into a pullback mode.

Guideline For Thursday

On Wednesday, after a brief decline down towards trading range support, NQ quickly rallied up, breaking above key trading range resistance at 3740. NQ remains above 3740 at the close, a positive momentum into the close.

On Thursday, NQ may or may not pullback in the morning before making another higher high above Wednesday's swing high.

Key support for Thursday is 3740.

-- Staying above 3740 is an indication NQ is going to higher high right away.

-- A clear break below 3740 is an indication NQ is going into a puylback mode before running back up again. On a pullback down, the next support is 3725. As long as 3725 is not clearly violated the uptrend should resume. If 3725 is broken, lower supports are 3710 and 3700.

The latest investors sentiment is showing (end of May) that the bulls were at 62.2, an indication the market is now at an elevated risk of a major pullback. When that pullback will commence, only time will tell, but the previous time the Bull reading were this high were:

1. At the end of 2013, bull reading was at 60.8 prior to the the early 2014 pullback, 

2. Then in August 1987 at 60.8 just before the 1987 crash

3. October 2007, at 62, before the big crash

Guideline For Wednesday

Another sideways choppy consolidation day on Tuesday, but it looks ready to make a move out of the current trading range 3710 - 3740. The direction of the break will depends on price in relation to key price levels.

Key resistance for Wednesday is 3740 and key support is 3710.

-- Without a clear and sustained break out of the range, NQ is going to stay choppy inside the current 3710 to 3740 trading range

-- Breaking above 3740 resistance implies a trending up move.

-- A clear break below 3710 support implies a fast drop down to 3670 support.

Guideline For Tuesday

Another sideways consolidation day on Monday, staying inside a narrow trading range between 3710 to 3740 for the 4th day in a row, an indication short-covering may have been exhausted for now, hence a possible setup for a big multiday pullback down. On the other hand, as long as key support is not clearly violated the next leg up should resume.

Key support level moving forward is 3700.

-- As long as 3700 is not clearly violated NQ should continue to either trade sideways or resume its uptrend.

-- Breakign bel;ow 3700 is an indication of a possible multi-day pullback down

Gold continues to sell-off, and should continue for  a while longer.

Guideline For Monday

NQ traded sideways on Friday, briefly traded below 3625 support, but then quickly rallied back up above support at the end of the day.

For Monday as long as it stays above 3625 support the rally should continue, NQ to make another new high. 

The uptrend has been very slow and choppy, a typical characteristics of a bull market that is mostly driven by short-covering engineered by HFT traders.

Selloff in the gold market continues