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NDX & SPX Futures Approaching Support

The Nasdaq 100 E-mini futures are approaching support with the bullish divergences still intact for now despite today's selloff. Should NQ break that support with conviction, the divergences & potential for a rally this week will be greatly diminished with a run at the Feb & early April lows likely. I still favor the former (orange) but the odds have increased for the latter scenario (red) with today's failure to hold above the 6648 level.

NQ 60-min April 24th

NQ 60-min April 24th

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The S&P 500 E-mini futures are also approaching support with potential divergences still intact on the indicators but pending confirmation via a bullish crossover on the PPO which would coincide with a bounce off this support zone. Key support levels coming up & again, the fact that the market couldn't follow through to yesterday's brief break & recovery back above those support levels that gave way again shortly after the close today certainly dampens the near-term case for a rally but the market will need to hold these support levels or the case for a near-term rally will begin to rapidly erode.

ES 60-min April 24th

ES 60-min April 24th

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2018-04-24T13:02:38+00:00Apr 24, 2018 1:02pm|Categories: Equity Market Analysis|Tags: , , , , , |6 Comments

6 Comments

  1. brandk3 April 24, 2018 1:12 pm at 1:12 pm

    I’m initiating a small pilot 10 contract QQQ 161 call May 18 contracts at these levels. I may scale in, if $158 level holds today. I expect an intervention by the FED today.

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    • rsotc April 24, 2018 1:39 pm at 1:39 pm

      I’ll also add that I think the Fed is fine with seeing some of the hot air come out of this overvalued, overloved stock market as they were finally starting to become concerned about the stock market bubble. I think that one of the biggest floors under market is all the planned share buybacks. I’d imagine a lot of companies have pre-determined levels where they will begin to step in & buy back shares if/when their stock falls to those levels. The big question is where are those levels are & will the forced selling from investors pulling money out of index funds & ETFs overwhelm any share buybacks from the market moving stocks?

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    • BIGBADWOLF April 24, 2018 1:50 pm at 1:50 pm

      What are some of the signs of FED intervention?

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      • brandk3 April 24, 2018 2:00 pm at 2:00 pm

        Bigbadwolf,

        Usually, there will be a steady stream of bond buying 2:00 to 2:30 pm and also around 3:35-3:40 pm. Over the past year I have seen the 10 Year being bought with an abandon. Because the yield above 3% would be critical for the stock market, and hence today’s sell off. Also, they will slam down the VIX towards the close. It is rising today but not yet at 20 (which is when I really have fun trading the markets, above 20). So watch the bonds. Bond buying decreases yields and it is positively correlated to stocks. That’s my simplistic version.

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  2. rsotc April 24, 2018 1:32 pm at 1:32 pm

    Basically, a long entry on the indexes when they fall to support while down 1.2% (SPX) or 2% (NDX) on the day while oversold on the 60-minute timeframe, especially in this market over the past few months which has been marked by sharp intraday reversals during big up & down day, certainly seems very objective with a stop placed somewhat below support. It may or may not pan out but the R/R is very favorable as the downside loss potential is paled by the upside profit potential, should QQQ reverse here soon & rally 2 – 5% from here.

    Daily charts starting to get ugly with the PPO on SPX & NDX starting to roll over on the backtest of their zero lines from below plus the fact that the buy signals on the intraday charts only played out for a small bounce so far before getting sold into impulsively so just don’t get married to the trade G-luck!

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