Is the NQ Headed Higher?

The E-Mini NASDAQ 100 has endured a major sell-off since topping out at the beginning of May. However, we could see another burst of strength before the next swing lower occurs. Here’s why..

Lower Value

The daily chart of the NQ shows the current monthly pivots along with the historical monthly pivot ranges. Prior to May, the NQ had been in a very bullish trend, which honored the pivot ranges quite nicely.

However, an Inside Value relationship in May signaled a major breakout, which occurred to the downside. Since then, the NQ has formed its first Lower Value relationship since Q3 of last year, meaning another round of selling could be ahead, especially if price remains below the current monthly pivot range of 2,600.

Headed to 2,526?

The 15-minute chart shows the NQ could be headed higher before it goes lower.

You’ll notice that an Overlapping Lower Value relationship has formed, which is usually bearish, but price closed the session above tomorrow’s projected VAL, which doesn’t confirm the relationship. In essence, it indicates a potential rally, should 2,480 be broken.

Price closed the session just below the 2,480 visual resistance level, and has even formed a clear cup-and-handle pattern, which points higher.

Since price may be overextended to the downside, we could see a test a higher levels before price can explore lower price levels. If 2,480 is crossed, look for price to rally back toward the 15-day composite VPOC of 2,526 over the next couple of days.

However, if we get an open that occurs below 2,460, all bets are off, as we could see another round of selling pressure back toward the monthly S1 pivot of 2,408.

TTT Hedge Appearance

I’m making a special appearance in the TTT Hedge Trading Room tomorrow at 11am ET as part of their 9th Anniversary Webinar Blitz!

I’ll be analyzing the current market using my one-of-a-kind PivotBoss techniques, so be sure to log on tomorrow and join the fun!

Join the webinar HERE!

See you tomorrow!

Cheers!

Frank Ochoa
PivotBoss | Own the Market

Follow Frank on Twitter: http://twitter.com/PivotBoss