What’s happening with the Nasdaq?

Good morning, Traders! It’s time for your Daily Direction update.

I’ve been writing a lot about the Nasdaq 100 E-mini (NQ) for some time now because I’ve seen some interesting movement in that market. Now, I’ve spotted a fascinating change in the NQ that we really want to pay attention to. Based on my current analysis, we’re seeing upward direction for the NQ.

We’ve known for some time that the NQ was going to go one of two ways.

First, the market had the potential to enter into a significant selloff in the short term while remaining bullish in the long term.

Second, there’s been the possibility that the NQ could find a new level of support and make a U-turn toward a higher price. And right now, it looks like the latter is coming true.

Let’s take a look at the analysis to see what’s happening!

Daily Timeframe Analysis

Turning to the daily timeframe reveals that the NQ has hit an area of support. If you look at the following chart, you’ll see that the new support line (diagonal lilac line) is drawn across six U-turn points.

What does that mean? Well, if this support holds, the NQ could rally toward 14895, a nearly +4000 tick move on the daily timeframe! That gives us an overall up direction. If you want more information about why these candlestick movements are so important to our analysis, please check out this resource I created that discusses candlestick charts.

Now, let’s take a look at the daily timeframe chart to get a better idea of what’s going on…

Chart the channel

The daily timeframe chart for the NQ reveals that the market has hit an area of support (diagonal lilac line). If this support level holds, the NQ could rally toward the 14895 price point in a nearly +4000 tick move (green up arrow). But it also looks like the price has hit resistance (upper red line)

We see the market clearly hitting that support line, giving us a chance of a rally (the up green line). But if the new level of support fails to hold, we’ll likely see a sell-off back down to a lower level of support, before finally seeing a rally.

It also appears that the price has started to hit a point of resistance (upper red line). That means we’re seeing the price move in a wave as it follows the overall bullish trend long-term.

Let’s take a look at the one-hour timeframe for a closer look at the short-term movement…

One-Hour Timeframe Analysis

The one-hour timeframe also shows upward direction, as the market is currently inside of an up channel. So as long as we stay above that lower U-turn level (the lower lilac line in the following chart), then buying into the market is still on the table.

The price is making higher highs and higher lows, we’ve formed a new low price that is higher than the previous one, and buyers are in control!

Chart the channel

The one-hour timeframe showing how the buyers are in control and the price has formed a low higher than the previous low (lower lilac line)

If we see a counter trend line break toward a bullish run at the top of the channel, we can expect an extension to take place in the one-hour timeframe toward 14131. Resistance is starting to hold as support (dotted red line). That means if we can get the U-turn to follow through we’ll have an opportunity to buy!

The Bottom Line

The overall direction for the NQ, both short-term and long-term, is up! We see the daily timeframe hitting a level of support that links across six known U-turn points. And the one-hour timeframe also reveals movement into an upward channel.

So, we have both the long-term and short-term analyses revealing overall positive movement. If we see a counter-trend break bullish near the top of the channel, we’ll look for long opportunities to buy.

The Bottom Line

The overall trend for the NQ is up. We see both the daily and one-hour timeframe (this chart) revealing an upward trend.

What we’re seeing in the current NQ analysis reveals the importance of using timeframe charts to follow the long-term and short-term trends in a market. Without that analysis, we wouldn’t be able to find buy-in opportunities in futures.

That’s why my strategy focuses on using the tools you need to make trading futures more manageable, helping you become a better futures trader every day! 

Mindset Advantage: Own It

It’s not the market. It’s not your indicator. It’s TRADING.

Looking to justify a loss? Getting mad at the market? Looking at the settings on your indicator?

When a baseball team is getting clobbered, someone from the bullpen gets the call. Their mission? ‘Wear it.’ Go out and own it for the team.

In the lonely world of trading, that’s you.

Let it go. The first step toward consistent profits comes when you accept the realities that losses will occur.

Price will have a mind of its own at times. It’s not you that’s at the wheel, it’s the institutions. The sooner you accept this, the more progress you’ll make.

Look at the past, but don’t stare. Accept what’s happened and move on.

Target tighter entries. Get the heck out of those losers you’re hanging on to.

Own it. And start to enjoy trading.

Definitions of Futures Terms

Fibonacci: The process of identifying potential retracements in price by using horizontal lines to indicate areas of probable support or resistance before the price continues in the direction of the prevailing trend.

Resistance: The high level a stock price reaches over time, serving as a visual cap that the market generally stays below. Reaching resistance usually results in a price drop.

Support: A price that a stock/future drops to that prompts traders to buy. This reactionary buying causes the price to stop dropping and start rising.

Bullish: A bull market is typified by a sustained increase in prices over a period of time.

Josh Martinez

Josh Martinez

Josh Martinez is an elite Analyst who’s been actively trading the financial markets since 2011. He’s known as one the leading innovative traders in this industry due to his his cutting-edge strategies.

Josh first burst into the scene when he took an initial deposit investment of $500 and turned into over $39,000 in just under 2 years.
Josh’s trading articles have been featured in Your Trading Edge, The FX Street, Trader Planet, Forex Crunch, Trading Pub, and Equities.com.

In addition to trading, Joshua has also trained thousands of traders worldwide. His strategies and systems have helped others find success in the market

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