And so to equities, which despite the many analysts who bemoan the current rally, the US markets continue to march higher much to their annoyance as the V-shaped rally on the weekly chart takes us ever further from the volume point of control at 7780 and denoted with the yellow dashed line and on strong volume. Last week’s candle was indicative of others in this rally with no meaningful wicks but a solid wide spread up candle and the key now for the longer-term development of the trend is a move through the 9300 levels and beyond as volume falls away dramatically on the volume point of control histogram and so presenting little in the way of volume-based resistance to a sustained extension the current rally.
Moving to the daily chart for the NQ Emini this gives us a more granular view and presents the levels I have highlighted in previous posts for this contract. Below we now have the blue and red dashed levels of the accumulation and distribution indicator which are solid regions and now acting as support having been breached. And between them sits the volume point of control itself. Next, we have resistance in the 9180 area which is being tested at the time of writing and denoted with the blue dashed line. This is important for two reasons. First, it has strength in its own right due to the thickness of the line on the indicator, but second and just as important it coincides with a sharp drop in the volume on the histogram to the right of the chart. So if this can be breached will set the market up for a further technical rally with price-based support below and declining volume-based resistance above.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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