As I get set to start a new trading week, I keep looking at my charts and I can’t help but feel that NQ futures is going to see a big roll down this week. When I’m doing my analysis, I try to refrain from taking a long term view of what the market “might” do because I’m not a swing trader. I’m usually in and out of positions very quickly. Also, this is a big earnings week for the NASDAQ as Alphabet, Facebook, Amazon, are set to report with Alphabet kicking it off on Monday after the close of the cash market.
This is the chart that has me feeling all “down” on NQ.
After making a new all time high during the overnight session on July 17, 2018, NQ started trading inside the channel pictured above. Now I’m actually showing the bottom of the trading channel as a mid line because from what I see, there is reason to think price could move below that mid line since there is still some areas of repair below. As I write this post, already price is moving down towards the bottom of the current channel. I can only imagine if Alphabet’s earnings do not meet the Street’s expectations, we could see further breakdown in the NASDAQ as we head deeper into the week with Facebook set to report on Wednesday and Amazon set to report on Thursday. It will be an interesting week to say the least!
Birds Eye View
From a higher time frame perspective, this chart is still very bullish and in the grand scheme of it all, it would make sense to see a pullback even to the 50 day MA at 7141 and still remain bullish on the overall structure of this market. For me that all starts to change if we break down below the 100 day MA at 6995, but let’s not get ahead of ourselves. Here is what I’m seeing…
Do not get overwhelmed by all of my levels, this is a daily chart and everything gets a little more evened out as I drill down to a lower time frame.
Closing Out The Month
From a charting standpoint, this week closes out the month for me. Looking at the 4 hour chart and the monthly volume value area, we can see that price spent most of last week trading between 7350 and 7410 which dragged up the volume point of control. With really nothing below until we get to a small volume ledge down near 7300, it’s not too much of a stretch to see this moving down in the already thin volume overnight session.
Hitting that level definitely puts the monthly VWAP and the monthly volume value area low in reach at 7269.25 and 7227.50 respectively.
Tomorrow’s trade plan should be interesting, but I will have to wait and see how this overnight session play’s out. If it continues to be this active, I may find myself taking a trade or two.
So to wrap this up for the night, as it stands right now, price opened outside of Friday’s value area, probed above to find acceptance but did not trading down past Friday’s settlement price and outside of Friday’s trading range. It’s a good night for the shorts so far. The question is, can they hold it? Come back tomorrow and we shall see!