As US indices start the week in a strongly negative mood, for traders and investors in equities it’s time to consider the weekly charts for a longer term view the NQ E-mini is the instrument I want to focus on in this post. And perhaps the most interesting candle here is that of last week which closed with an effort to rally on high volume, closing lower overall and giving a strong clue to the outlook for the week ahead. Note the deep wick to the upper body which saw the index climb to 11,500 before falling sharply and ending the week at $10,927 on high volume and confirming the selling pressure, selling which has continued in early trading with the index currently down over 160 points at the time of writing to trade at 10,755.25.
From a technical perspective, immediately below there is little either volume or price-based support likely to provide a platform of stability, and indeed as we approach the 10,500 level and below, volume on the VPOC histogram falls away dramatically. This is significant because should the NQ reach this level we can expect to see the price move swiftly through this region and if the bearish sentiment now taking hold continues the logical stopping point below then comes in at the 9,500 area. And with the US election also fast approaching it goes without saying that volatility is going to increase dramatically.
By Anna Coulling
Charts from NinjaTrader
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