A Glance at $QQQ

Someone asked about this in the chat today; I thought I would share it more widely among users at large.

Structure looks clean, hopefully complete here. It’s obnoxious that the wave balance here has become 2:1, but ’tis life. Target is the orange box at a minimum (it may go lower, but we’ll have to see how deep the first wave is before I can gain more clarity).

There should be plenty of supply up here at the prior consolidation from early June.

QQQ


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Two Technicals on $NQ

Two observations here regarding the Nasdaq 100 futures. We’re at an important prior high, and there is also excellent wave balance here right at today’s high as well. I remain committed to the view that this rally will fail soon. Of course it would have been nice to have expected a short squeeze of this size, but at any rate, I think that’s all it is and I’m not yet interested in actually trying to play for the long side because I don’t like to play into what I think are finishing moves.

NQ


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


Two Technical Observations

It’s nice to see some selling here (because I was expecting it). But, I want to note two signs of strength.

Despite giving up the range between the two long-term highs (2018 & 2020), the Russell could not even manage to break a prior low (green arrow):

RTY

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


A Few Morning Notes: $ES, $NQ & $RTY

I will make three technical observations, one for each of three U.S. indices.

The S&P has broken below its triangle structure, and seems to be retesting it from beneath (green arrow). If that fails, I would expect us to go much lower over the coming days.

ES

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


$NQ Local Reversal Target & Wave Count

As this whole structure develops across instruments, I am gaining confidence in some very bearish structures. Consistent with the basic structure on the Nasdaq (here), Apple (here) and Bitcoin (6th chart here) and other things as well, we may interpret the Nasdaq 100 as completing a wave 2 of significant degree. We are virtually at the 61.8% retracement of orange 1 now, and I would like to see this reverse soon to help to confirm this count.

The H&S target noted here is around 10,460, but if this is—in fact—a wave 3, it may go significantly lower, even as low as 9173 (or lower), believe it or not—hence the gloominess.

NQ


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


Public Chart: $NQ Structure and Target

Aside from a handful of Twitter posts, I have not published a public chart in a while, and so I thought I would here.

I do not like the structure that has developed on the Nasdaq 100 futures. There is a reasonable chance that it has formed a large head and shoulders continuation pattern and I suspect the structure may fail. The “right shoulder” has a diverging high (RSI) as we speak (this can be broken with a strong continuation of the rally, but I am skeptical of that).

If this does fail, I have noted the target on the chart.

NQ


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


A Way to Count the Cash Session Here, And Some Other Things

Given the nexus of things I try to take into account, I still can’t shake my suspicions that is a bull trap. One weird way we can also count the cash session bearishly is as follows.

The only real “impulsive” part of the decline from the 6/28 high is the “green 1” I have labelled in the chart below (green arrow). Most people see the whole decline (from the top to my “blue b”) as some kind of 3-wave structure, as they should.

However, it is possible to count the whole thing as an expanded flat, and this would be a terrific illusion for anyone looking to get long. The decline doesn’t look impulsive (but it actually would be), then we have an exit out of “technical” bear market territory, and a break of local trend (red line), and the retracement back up looks too deep for something like a “2.” BUT, if the “1” only goes to where I have it labelled, then we’re actually only at the 50-61.8% now (orange box).

In other words, there’s a lot here that a bull would want to see to feel confident, and that makes me very suspicious.

And so, if we don’t go too much higher, there are ingredients here for a reversal.

SPY

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


$NQ Gives Us a Different Picture

Unlike the S&P futures (which only has the look of a 3-wave decline—which is why I labelled it as an orange “A” here), the Nasdaq 100 futures lacks that defect, as it made a lower high on 6/28 (green arrow in the chart below), which gives us a full 5-wave decline (instead of only 3).

That should be an impulse wave of some kind, and I have labelled it as green “1” below.

Now, it it is possible that green “2” is an expanded flat, with “2” coming back to revisit the “4” of the prior (blue) degree, which is common:

NQ

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


Caution on $NQ

I’m sorry to be that guy who complained about the need for a rally, who then folded like a wet napkin the moment he got it, but I’m not feeling good about the structures.

The Naz has made a sort of “funnel,” with what looks like a triangle right in the middle of it (we’ve discussed that shape elsewhere already). I’m not happy to see a triangle (if that’s what it is) that sits “low.” It’s good if, like my crayon drawing on the right, it sits “high” after a vertical rally. But when they sit low like this, smashed in with the waves that precede them, they’re more likely to be “B-Waves” instead of “4th Waves,” making this structure more likely to be countertrend rather than impulsive (meaning the trend is still “down.”)

NQ

If it is countertrend, of course it can still go higher, but, if I had to place probabilities, I lean to the view that this rally will fail.

Now, if things develop and we keep going up and the cash sessions (which lack some of the defects of the futures charts) look very good, I may revert and become more bullish again. But until them, I am very cautious here for the time being.


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.