NQ1!, New Feb 2019 High

15 Feb 2019A new February high was set in pre-market. Kudos to buyers. The spike ran some stops but the price quickly retreated offering a short opportunity around 7070 level (top of the recent balance). This is a typical and a high probability setup to fade a move. When the price is grinding up shorting requires a precise timing and a lot of patience. But when the top is blown and the price is exhausted the shorts work very well and quickly. Eventually, the price came back to previous day range support and offered a quick long setup. After that the market was chopping in a small range. Some observation. The February POC (point of control) has shifted up to 7020 level. The 6970 level is a line in the sand. Loosing it would invite more selling. Today's spike, created by overcommitted buyers, is something to watch as well. It could be viewed as a false breakout and a selling tail of the recent balance (7070 top). If this hypothesis is confirmed we could see more selling. This is a larger timeframe pattern and it could take time to unfold. If not, then the buyers will continue their marching to upside targets: Dec 2018 Hi, Top of the projected balance (empty box). Watch 7043 level - a 3 day POC. A lot of energy built around that level. It usually serves as a launching point of a directional move.

02/15/2019

17 Feb 2019

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On Monday the cash market will be closed but the futures will be traded till noon. Usually, a short session does not make any change to the existing structure.

Something for the upcoming Tuesday's session:

While reviewing the Friday's price action I noticed that the FAANG index that I use during day time trading is diverging. There is a negative divergence with the NQ. The FAANG index tracks big tech stocks. The index is not an indicator per se, however, one need to be aware of that disconnect. The FAANG stocks play a significant role in the NQ. The index closed right on the trend line started from December 24th low. A strong breakdown of the trend line would impact the NQ. Something to be aware of and watch closely.

02/17/2019