NAS/QQQ Weekend Look (Feb 22-25)

Here is the weekend look going into the shortened trading week of Feb 22-25. Last week the NAS closed down 1.7% after making a brief push up into the 9ema. Market weakness can be attributed to more hawk talk from the Fed, Russian/Ukraine tensions and weak earnings from highly watched growth stock like ROKU & SHOP.

It looks as if we have more volatility on tap for the shortened trading week. NAS futures have already gapped down 1.3% on Sunday night as media outlets continue to report that a Russian invasion of Ukraine is imminent. Other than continued inflationary pressures due to rising energy costs I do not see war in Europe having a direct effect of Nasdaq stocks. What I do see is an excuse for nervous market participants to continue selling in a bearish environment. The NAS now sits precariously at the Jan lows at the neckline of a newly formed H&S shoulders pattern. A break of the neckline at 13706 implies a possible downside move to 13000 and potentially 12000. That is about another 15% drop from here. The compound corrective move I pointed out last week has a completion target in the 13000/12700 zone.

Keep in mind the bearish move is not a forgone conclusion. The head and shoulders pattern is not confirmed until price breaks the 13706 level. There is always the possibility that the h pattern will hold and price moves higher on some sort of change in sentiment. A pull back in Russian/Ukraine tensions or a change in tone by the Fed could reverse this market sharply.

Just as I was typing this positive news has come out about a possible Biden/Putin meeting next week. My take on this .. pay attention to what actually happens not what the media and other say will happen.


Weekly events...


Tuesday... Consumer confidence... Earnings from HD, M, CZR, KTOS, TDOC, SPCE, PANW
Wednesday... Earnings from: SSYS, TJX, VIPS, WB, AEM, CLOV, EBAY, FIVN, FUBO, FLGT, HTZ, SKLZ,
Thursday... Jobless Claims, US GDP, New home sales, Crude inventories... Earnings from: BABA, DOCN, PLNT, PZZA, MRNA, PLUG, ZS, MNST,NVTA
Friday... Consumer spending, Durable Goods... Earnings from: FL, IMGN, TREE

Bullish Notes...

Oversold bounce possible
Russia/Ukraine tensions subside
Positive earnings surprises
Dropping yields


Bearish Notes..

Increased Russia/Ukraine tensions
Earnings disappointments
Rising yields
Breakdown of key support at 13706
Buyers still expect lower prices

Komentar:

Look at the H&S pattern

Komentar:

Here is a look at the h pattern. Tough pattern as it can look very bearish but go the other way explosively.

Komentar:

Gap down open below 13706. So the compound correction (AB=CD) could be in play. Keep in mind this is during a low volume overnight session. US cash market is more important.

Komentar:

Compound correction it is. Neckline broke on Russian invasion news. Look for the green box and the 1.618 area to hold. Next leg takes it down to the 2.24 extension. Major long term trend line in play right not. Good chance for relief bounce here.

Komentar:

Here is look at the longer term trend line I'm watching. A lot of the covid excess has been deflating. The Russian news has simple accelerated things.

Komentar: