Volume tells its own story for the NQ Emini on the daily chart

The daily chart for the NQ Emini is building into an interesting phase of price action as the index struggles to main any upwards momentum as it continues to oscillate around the volume point of control which remains anchored in the 11,180 area. This is where the price has settled throughout September and into early October and as such represents a point where the price is in agreement with no strong sentiment to drive the NQ higher or lower. However, note how on each attempt to rally, volume falls away signaling a lack of appetite for higher prices. This was brought into sharp relief yesterday with the green, up candle associated with average volume only, and once again confirming the fragile nature of risk sentiment, certainly as far as this sector is concerned.

In terms of price-based support and resistance, there are two key levels. Above we have resistance building in the 11,480 area denoted with the blue dashed line. This is a level that has been tested twice as can be seen on the right on the accumulation and distribution indicator which displays these levels graphically for us in terms of their strength. This is a minor level at present, but if continually tested it will increase in strength accordingly. If the index is able to breach 11,700 and beyond, volume on the VPOC histogram falls away dramatically and so opens the way to an easier move higher.

Below two areas of potential support await. The first in the 10,700 area with a cluster of two significant levels, one 3x and another 2x which together offer a solid region of potential support with a single further level below at 10,380 as denoted with the blue dashed line which has been tested four times thus far.

The key, however, is the volume of yesterday which looks ominous, and with such a lack of participation, it is hard to see bullish momentum being maintained and what is more likely is a move back to the VPOC and below as the Trump drama continues to play out in glorious technicolor.

By Anna Coulling

Charts by NinjaTrader and indicators from Quantum Trading