This second false breakout above the 11741.50 resistance on /NQ (Nasdaq 100) does not bode well for the near-term bullish case, despite the positive divergences remaining intact for now. At least, it increases the odds of another test of the bottom of the recent trading range. These two whipsaws are also in line with my expectations over the past week that we’d start to see an increased rate of whipsaw signals leading up to the elections.
NQ 60m Oct 21st
Bottom line: Active traders might opt to keep things light or focus on trading opps other than the index ETFs & futures as whipsaws are likely to continue up until (& possibly after) the elections. Basically, /NQ remains within the trading range (white box) with a definitive breakout in either direction likely to come sooner than later. Today’s false breakout significantly reduces the chance of that next resistance/potential target of 11920 being hit until & unless the $NDX can make a solid & sustained breakout above the top of the range (as well as those two false breakout highs).
Earlier today, in the comment section below yesterday’s Gold Members Chart Requests video, I posted that the PTON short setup was starting to crack down below the minor uptrend line, thereby triggering an early sell signal (along with the first chart below).
PTON daily Oct 21st.png
Since then, PTON has continued to move lower since the trendline breakdown highlighted earlier today & with the stock down nearly 5%, that can now be considered an ‘impulsive’ breakdown, thereby helping to confirm the sell signal & even better if PTON continues to drop into the close today. My sole target remains slightly above the intersecting primary uptrend line + 98.68ish price support. FYI- PTON is scheduled to report earnings on or around Nov 3rd. As such, if we don’t get some decent follow-through selling soon, the stock could go into a holding pattern as it begins to approach the earnings date.
PTON daily 2 Oct 21st
With that being said, the odds for this breakdown proving to be a whipsaw (i.e.- false breakdown) are elevated as with most stocks at this time. For those wanting a little more evidence to initiate a short position, a solid move below 126 (minor support) on this 60-minute chart “should” open the door to more selling & increase the odds of a PTON short trade panning out. If it weren’t for the upcoming elections, I would make this an official trade idea. As I’m expecting increased volatility & whipsaw signals over the next couple of weeks, I’m passing it along as an unofficial trade idea for now.
PTON 60m Oct 21st