New high ground for the NQ Emini?

It’s been a fascinating start to the new trading week, with the yen pairs initially signaling a shift in risk sentiment as forex markets opened gapped up on the open as the Chinese trade talks appeared to be moving to a more positive conclusion. As always, gaps can and do get filled, and whilst the currency pairs have not reversed entirely, much of the positive euphoria has drained away, and it’s now for the US indices to pick up the baton of momentum, which has certainly been the case for futures, with further gapped up candles at the open. But again, gaps do get filled!

The NQ emini is one such, having closed on Friday at 7693.75, before opening overnight at 7781.50, with the cash markets now joining Globex at the physical open with the futures contract trading at 7826.50 at the time of writing. From a technical perspective, minor resistance in the 7800 area and denoted with the red dashed line of the Accumulation and Distribution indicator has been breached with the gapped open, and ahead of a further area now waits at 7900, a level which capped the rally in May. On the positive side, volume on the volume point of control is now falling away and therefore providing today’s price action closes with a positive candle and strong volume, we should see this rally extend further, and just like its sister index the ES emini, break out into new high ground in due course, a view supported by the Trend Monitor indicator which remains firmly blue.

By Anna Coulling

Charts from NinjaTrader and indicators from Quantum Trading