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Index Futures Backtesting Support With Increased Chance of A Pullback

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Index Futures Backtesting Support With Increased Chance of A Pullback

There is potential negative divergences forming on the 60-min chart of QQQ & SPY with confirmed negative divergence on the 60-min PPO of the index futures. AMZN (Amazon.com) also just hit my 1616 first bounce target where a pullback is likely on that top-heavy weighted Nasdaq 100 component. As such, even though /NQ & /ES have already backtested those key breakout levels from Friday (now support) & are still trading above them, we could see a dip back below those levels before a resumption of the uptrend, as per Friday's closing market wrap video.

/NQ is backtesting the key 6408.50 level that was taken out on Friday & which should now act as support. However, negative divergences on the PPO as well as potential divergences on the QQQ & SPY 60-min charts coupled with the near-term overbought conditions increase the odds for a pullback to the 6272ish level if /NQ breaks below 6405.

NQ 60-min Jan 7th

NQ 60-min Jan 7th

/ES is backtesting the key 2522.50 level that was taken out on Friday & which should now act as support. However, negative divergences on the PPO as well as potential divergences on the QQQ & SPY 60-min charts coupled with the near-term overbought conditions increase the odds for a pullback to the 2493ish level if /ES breaks below 2520.

ES 60-min Jan 7th

ES 60-min Jan 7th

FWIW, my preferred scenario is that those support levels will be taken out today with a decent pullback in the US stock indices today & possibly into tomorrow as well although as I like to say, support is support until & unless broken.

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2019-01-07T12:22:28+00:00Jan 7, 2019 10:20am|Categories: Equity Market Analysis|Tags: , , , , , , |6 Comments

6 Comments

  1. Robert_Matthews January 7, 2019 10:24 am at 10:24 am

    thanks Randy!

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  2. jumpingbean January 7, 2019 10:28 am at 10:28 am

    thank you so much for this!

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  3. TWC January 7, 2019 10:45 am at 10:45 am

    @rsotc Want you clarify you meant NQ support at 6395 Instead of 6495.

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    • Kostner January 7, 2019 10:55 am at 10:55 am

      I am confused I thought it was 6408 instead of 6498 ?That’s what Randy has on his chart?

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  4. Deltapatch January 7, 2019 10:50 am at 10:50 am

    Thank you!

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