As I continue to work out the bugs and refine my system, I am bringing back an old favorite – Supply / Demand Zones. With all the research I have been doing, I have realized that these zones play a far more important role in the price action than I had previously thought. I also learned that I may not have been plotting them properly previously, so after educating myself on the proper way to plot them, I am introducing them back into my charts.
Now before I post my chart with my levels on it, I do want to talk about what is in store for next week. On Monday, the first of the FAANG stocks will be releasing their earnings. After the market closes, at approximately 1:05 PM Pacific time Netflix will be reporting its Q2 earnings results (Netflix announces details of earnings release call). If you have been watching, you know that Netflix has seen their stock price drop ahead of their earnings call. We could see more of that early on Monday. Just something to be aware of, especially if there are any leaks prior to the release, it could have an impact on the index as a whole.
Next Weeks Levels
Last week we saw some decent volatility for summer trading on NQ futures. The week opened with a period of consolidation, followed by a push up in the early overnight session for Tuesday’s trade date before falling back to test July week 1 highs. From there it was a strong push up to a new all time high at 7414.25 during Friday’s overnight session, before price pulled back some and began to consolidate. The chart below illustrates that move.
For Monday the following levels are in effect:
Settlement – 7393.00, Yearly / All Time High – 7414.25, Friday Session High 7405.00, and Session Low – 7367.00
The profile levels I will be watching for Monday are as follows:
TPO – VAH – 7402.75, POC – 7323.25, VAL – 7385.25
Volume – VAH – 7399.25, POC – 7398.00, VAL – 7385
It’s important to mention that Friday’s high is considered a poor high and should be carried forward. As a side note, the poor high was formed during periods E and F, which is early in the trading session. This was a good indication that, at least from the perspective of the shorter time frame traders, the market was too long and we observed price moving away from the poor high (a trading opportunity). The market did attempt to push higher and repair the poor high, but did not have enough to get there. 7405.00 will be a level I watch closely when the U.S. session opens on Monday.
On the higher time frame, the only level’s in range going into the start of the week is the Monthly Volume VAH at 7349.75 to the downside and the Yearly/Monthly/All Time High at 7414.25 to the upside.
Thursday the 12th of July was a breakout day for NQ extending higher from the three-day trading range from Monday, Tuesday and Wednesday. This impulsive move up left some areas to be aware of heading into next weeks trading session.
Naked (as in untouched or untested) Volume POC at 7366.25 and TPO POC at 7362.75. There are also two single print zones from this trading date, the first at 7319.50 to 7330.75 and 7350.00 to 7352.25. The last level carried over from Thursday’s price action is the naked low at 7288.25. These levels serve as possible areas of reversal and make great targets if the setup presents itself.
For the supply demand zones, the most relevant one at least initially is the supply zone from 7408.75 to 7414.25. I may look at the lower demand zones if significant price corrections occurs, but for now I’m just aware of them.
As I get my live trading under way, I will be posting my progress and journaling my trades daily. If you are interested in following along I encourage you to visit daily. In addition to my trading log, I will post screen captures of my trades showing entry and exit points and making note of what my thought process was at the moment. I welcome any and all comments and critiques, all I ask is that it stay relevant to the subject matter. I’m still developing my process in this “reboot” and psychology is extremely important to that process so staying on task is a concern.
If you have any questions, feel free to ask away in the comments below, just keep in mind, I do not answer questions during the trading session, but I will make every attempt to answer the questions prior to posting my daily recap / Market prep.