iamiam wrote a post · Feb 7 21:37

UPDATE February 7

A quick update.

The markets are at a crossroads. I do not believe that this move is done. I have 18000 on NQ and 5000 on $E-mini S&P 500 Futures(MAR5) (ESmain.US)$ . I think the markets want to reach those numbers. There is a big pullback coming. It could happen before making a new high, BUT I DONT THINK SO. That's just my bias. This pullback could also be a rotation. A rotation back into defensive. Watch oil ( $Energy Select Sector SPDR Fund (XLE.US)$ ), Healthcare ( $The Health Care Select Sector SPDR® Fund (XLV.US)$ ), and Utilities ( $Utilities Select Sector SPDR Fund (XLU.US)$ ) to see if that's where money is flowing.

I track the Nasdaq because tech is the leader of the markets. It leads on the way up and on the way down.

$E-mini NASDAQ 100 Futures(MAR5) (NQmain.US)$

the 2 most likely bullish paths I see. My preferred is that we hold Mondays low and break yesterday's high to move towards 18000. The second option is that we sell down to near 17000 hold around 17150 and then move up to 18000.

2 hr Charts of the 2 bullish paths

If we hold above 17555 (Mondays low), we can challenge the upper bollinger and push past it a little to reach 18000.

If we break 17555, then the 200 MA or trendline should hold between 17000-17250... IF price breaks below 17000, then prepare for more downside.

$Invesco QQQ Trust (QQQ.US)$

Below are the 2 hr and 30 min charts. Watching resistance to break to confirm a breakout.

Let's look at the major influences to see if a rally is likely.

$USD (USDindex.FX)$

Bearish chart. But it is consolidating for a major breakout. We are nearing an end. This wants to go up. It's just at resistance and needs to build liquidity to move up.

$Micro 10-Year Yield Futures(FEB4) (10Ymain.US)$

The ten year looks bullish. It looks like it wants to try to break out. As long as it doesn't run above 4.20, the Nasdaq can rally.

$VIX Index Futures(JAN5) (VXmain.US)$

Nothing bullish. It's trying to find a bottom.

It looks like a rally is possible. BUT REMEMBER, We are in a topping pattern/cycle, and these take in as much money as possible from both sides before making a quick move and failure.

A look at a steel stock I'm in

$Cleveland-Cliffs (CLF.US)$

Big breakout move on earnings. It looks like it digested its breakout and wants to challenge 20.75 and then 21.45. From there, I want to see how the pullback goes. But I'm bullish until 21.45. A failure is below down to ~19.20. That would take out the entire earnings pop. That would not be good, as it would mean those who entered at earnings are exiting already.