NDX and COMP charts
COMPX daily
mywebpages.comcast.net
NDX daily
mywebpages.comcast.net
NDX weekly
mywebpages.comcast.net
Looking at the daily COMPX, all I can say is that 20 EMA we've been over for 2 days HAS to hold. HAS TO! Otherwise the downtrend will resume. And we all saw how quickly that can happen this afternoon...
Also a break of the 20 daily will also break the COMP back below the descending triangle it just broke back into, and under 1700.
If the COMPX breaks back under the blue 20 EMA and 1697, futures shorts are going to be selling that break like crazy. Just like they did today after the tank on the 15 min chart, you can see it in the close up chart posted at the end, and how that the 20 ema became resistance for hours after it broke through, shorts hit it on every backside bounce once the weakness was evident.
Really too bad too, that that news hit right as the Nasdaq was breaking out, the signs were everywhere. New highs for the day all over the place, A/D volume was surging with the TICK it was all ready to blast off... A futures broker who sends nightly emails said the pit sold the futures off on the rumor about the Argetinian president.
Those guys sure sell first and confirm the validity later, they were dumping them in huge lots all at once. And you can see on that closeup chart where everyone's stops were, it just tumbled right down taking them all out within minutes.
But if you look at this weekly chart, the one with the still forming and hopefully going to hold morning star doji reversal going on, that it as a VERY convenient time for them to sell, not only was the nas really overbought, but the were shorting the backside bounce to the 20EMA on the WEEKLY! The news was just the catalyst.
Shorting the 20 EMA backside bounces is the classic "grail sale" play futures traders talk about. And it works on any time frame, as long as the candle is under the EMA. That's why it's so hard lately for the nasdaq to move up, the 20 EMA has been resistance now for months. Only a few short squeezes got it over, and those failed. And once the weakness takes over, they short it at the 9 or 10 ema and it cannot even GET to the 20 to try. And once the 20 breaks to the upside, the battle begins anew at the 50ema, which was where the nasdaq stopped today - only a couple of points away.
And that's why it's SO important the nas - or even any stock - holds the 20 ema daily, once it slips under, it's in short all bounce mode again until the next ramp pushes it back over.
Important to note on NDX: although we have this morning star reversal possibly forming on the weekly, on the daily, the NDX still HAS NOT broken back into the descending triangle as the nasdaq has on a closing basis (It's at 1330). It broke over today, but was forced back below when the selloff occurred.
So that was the first failed test of important resistance on the NDX so far. Being news related, I'm sure it's going to try again soon!
Here's a close up of the bearish evening star reversal which janski pointed out on the 15 minute chart, which then reversed immediately into the rally as the DOW and SPX brokeout.
Also in this chart is a closeup of how once the futures broke the 20EMA on the 30 minute chart, it was all over.
Once the uptrend reversed, every attempt to break back over was shorted from then on into the close.
NQ 1330 is the breakout of the top of the short term end of day trading range shown in this chart. That and the double bottom of 1311 will be the hint of the early morning direction, which ever side it takes out first...
mywebpages.comcast.net |
