After a brief undercut/momentum-fueled overshoot of the 7543 support level followed by bounce to backfill yesterday gap on QQQ, /NQ (Nasdaq 100 Futures) has drifted back down to that 7543 support level once again which increases the odds of another bounce starting from this level in pre-market & potentially carrying over into the regular session today unless that level, along with yesterday’s lows, gives way soon. Even if /NQ, QQQ, /ES & SPY were to take out yesterday’s lows soon, we need to watch the 2830 minor support on /ES along with the 282ish minor support on SPY which could contain any lower lows today.
Bottom line, while it still appears that more downside in the broad markets is likely in the coming days to weeks, the near-term oversold conditions along with the fact that the major stock indices & a few market-leading stocks closed at or near support yesterday makes the very near-term (today & early next week) outlook unclear although the intermediate-term outlook remains bearish with the 2nd & 3rd price targets on the QQQ short trade still likely to be hit even if the markets mount a counter-trend rally before then. Yellow lines on these 60-minute charts of SPY & QQQ mark resistance levels which are likely to cap any snapback rally.
I have commented on crude recently, both here in the trading room & in some of the recent videos. Basically, both USO & /CL recently put in bullish divergences on the 60-min charts & that, coupled with the news that broke Sunday night regarding the increasing tensions between Iran & the US have both provided some near-term bullish tailwinds for crude oil. While the near-term direction isn’t very clear, I don’t see enough bullish evidence in the charts to warrant closing out the USO swing trade as I still think that T2 & T3 have a good chance of being hit in the coming days to weeks before the suggested stop is hit. I also mentioned that I will likely lower the stop to entry if/when T2 is hit. Finally, I had added some yellow lines at resistance levels which are likely to cap any rallies. Here’s the /CL daily chart along with the updated 60-min chart including a minor downtrend line to watch that could spark up to any of the yellow lines if taken out impulsively.
Finally, a quick look a the charts of GLD (gold ETF), SLV (silver ETF), /GC (gold) and /SI (Silver) futures, all of which are poised to trigger breakouts above these downtrend lines, falling wedges, especially if confirm with a breakout in the comparable falling wedge pattern on the EUR/USD.