The E-Mini NASDAQ 100 has been extremely active the last few weeks, and has alternated between high- and low-range days, which allows for a better anticipation of breakout days. Today could be one of those days. Here’s why..
Inside Day
As you know, I am a big fan of the Inside Day formation. This candlestick pattern occurs when the current day’s range (from low to high) stays inside the range from the prior session. This relationship can usually lead to amazing breakout opportunities…and today could be one of those days for the NQ.
The daily chart shows yesterday’s range in the NQ was a mere 13.5 points during the intraday session, and stayed inside the daily range from Tuesday’s market. A narrow range coupled with an Inside Day relationship increases the chances for big movement.
If the NQ opens the session outside of yesterday’s range and value, we could see quite a move on our hands. That is, a gap above 2,322 or below 2,316 could spark a Trend Day for this contract.
If price opens within range/value, we could still see decent movement, but breakout confirmation must first be seen.
Inside Value
The 15-minute chart shows price has also formed an Inside Value relationship, which occurs when today’s value area is inside yesterday’s value area. This is a similar pattern to the Inside Day relationship, but uses Market Profile’s value area to judge the relationship.
When the value area is extremely narrow, the chances for a breakout increase. Essentially, the NQ is winding up for a big move…and today could be the day.
High Fives!
I’ve been extremely busy with projects and research lately, so I’m sorry that I haven’t posted much lately. I’ll get back to a regular schedule soon.
I am happy to see that 2 of the 3 stocks from my last post “3 Stocks to Watch” have reached their targets! SLB reached its first target of $90, with a gain of about 7% and VLO came within 1 tick of $27, netting a gain of 10.5%. Agilent was the only one that didn’t perform…and is down about 3% since the blog post. Can’t win them all..
Let’s see if the NQ can deliver a big day for us!
Cheers!
Frank Ochoa
PivotBoss.com
Follow Frank on Twitter: http://twitter.com/PivotBoss
