On the very short-term time frame, /NQ has carried up to that next 11355 resistance/target that mentioned was most likely on this 10-minute chart in yesterday’s video since we didn’t yet have any divergences but has now put in that divergent high I was looking for. As such, a near-term pullback is likely but other than a hard fade of today’s pre-market gains (QQQ needs to close back below 270), the next pullback is likely to be bought up.
NQ 10m Oct 18th
Keep in mind that the term “likely” is relative, basically meaning more than a 50% chance. However, as I also stated in yesterday’s video, developments (such as this) on the very short-term time frames are often overridden but very significant developments on the longer-term time frames. In this case, QQQ is poised to gap solidly above the key 270ish resistance level, which is a very bullish event until & unless that recovery fails.
While I am skeptical if things will continue to play out so similar this time around, that analog between this bear market & this point up to the 2007-2009 bear market saw an explosive gain of 10.6% off the comparable divergent low before the most powerful leg down in that bear market around this time in 2008.
$NDX failed divergences 2008
Bottom line: Today’s gap & recovery of the key 270 level on QQQ is not only bullish in price action but also continues to firm up the positive divergences on the 60-minute, daily, & weekly time frames. If & when QQQ happens to fall back well below 269 (not 270) and then especially below the recent lows, that would most likely open the door to the next wave of selling & quite likely very impulsive selling as back at this point in 2008. Until then, today’s price action is 100% bullish & will likely lead to more upside although we are still in the thick of earnings season with elevated risks for the stock market & financial system that are far from behind us.