It is said everything comes in threes, and this is certainly the case for the major US indices with normal service now resumed. The recent shakeout mirrored that of mid-May with two falling sessions followed by the reversal, and as I explained on Tuesday in our live webinar the recovery is what we expected to see as this is not the start of the big short. A major selloff will come and possibly early in 2022 when as always we can expect to see a selling climax develop over a number of weeks and months as the precursor to such an event. Until then it’s a case of as you were, with the three primary US index futures all recovering well, and opening gapped up early in today’s session.
For the YM Emini which continues to follow the NQ Emini higher, we are now approaching a key level, and yesterday’s price action was also significant. First, as we can see there was a strong region of price resistance as denoted with the blue dashed line of the accumulation and distribution indicator at 34,630 which displays this automatically on NinjaTrader and which thickens the line according to the number of times a level has been tested and held. As we can see, this level capped the advance of May, and also in June, but yesterday this level was breached with today’s gapped up open thereby taking the market higher still. The issue now is whether the congestion phase of earlier in the month and just below the psychological level of 35,000 can be achieved and if so, we will then have an extremely strong platform of support in place for the bullish trend to develop further once volume increases as we move out of the quieter summer months and into the final four months of the year.
Remember too we are deep in earnings season, and with the Tech giants returning some stellar numbers, this should help the NQ Emini to drive ahead taking both the YM Emini and the ES Emini with it!
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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