My current nasdaq sell
Nasdaq Short Trade Report 30th - 4th
This report outlines a potential short position on Nasdaq for the upcoming week, based on a confluence of technical indicators and macroeconomic data. Key economic releases such as PMI (Tuesday) and NFP (Friday) are expected to have significant market impact. A weak PMI report, indicating a slowdown in global manufacturing or supply chain issues, could fuel further bearish momentum for tech-heavy indices like the Nasdaq.
The trade setup is backed by more than six confluences, including technical sell signals, volatility measures, and fundamental macroeconomic indicators. The entry is targeted around 19,990.34, with a take-profit (TP) at 19,237.95 and a stop-loss (SL) at 20,038.60. This trade is powered by an expectation of significant moves driven by upcoming data and market sentiment.
Market Overview
Key Economic Events:
* PMI on Tuesday: A weak PMI could indicate a slowdown in global manufacturing and potentially push the Nasdaq lower.
ADP Employment Change (Sep)
Wednesday
Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
ISM Services PMI (Sep)
Thursday
A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the US Dollar (USD). A reading below 50 signals that services sector activity is generally declining, which is seen as bearish for USD
* NFP on Friday: Weak job data could confirm economic slowdown, driving further downside pressure on the Nasdaq.
The broader market sentiment shows increasing volatility, with global supply chain constraints and inflationary pressures impacting growth forecasts. If both the PMI and NFP data come out weaker than expected, this could lead to a sustained sell-off, extending the hold on our trade.
Technical Analysis:
1. 1H Sell Signal & 4H Rejection off Resistance
* 1H Chart: The EA has generated a sell signal on the 1-hour timeframe. We are awaiting further confirmation from the 4H rejection off resistance, which will strengthen the bearish case.
* 4H Chart: The 4-hour rejection off resistance level is crucial for reinforcing the short. If resistance holds, it could signal a substantial move to the downside.
2. RSI Overbought Condition on 4H
* The RSI on the 4-hour chart indicates that the market is overbought, suggesting potential for a pullback. The last significant overbought point led to a sell-off, with the entry expected around 19,990.34. The TP is set at 19,237.95, and the SL at 20,038.60. This equates to a move of roughly 752 points (or pips), calculated between the entry and TP levels.
3. Rising ATR (Volatility Indicator)
* The ATR is nearing a reading of 100, signaling that the market is becoming increasingly volatile. Such levels typically indicate sharp, aggressive moves ahead, likely coinciding with the NFP release on Friday. This supports a more volatile Nasdaq environment, conducive to significant price movements in our favor.
Fundamental Analysis (Macroeconomic Indicators)
4. Dollar Index (DXY) Impact
* DXY: A rising Dollar Index often places downward pressure on tech stocks in the Nasdaq, as a stronger dollar reduces overseas earnings. The DXY has bounced off of support and appears to be trending upwards, which could be confirmed after the next market open with a 1H buy signal from the EA. A bullish DXY will further reinforce the bearish outlook on Nasdaq.
* VIX (Volatility Index): Rising VIX levels indicate increased market uncertainty, which tends to lead to sell-offs in riskier assets like tech stocks. If the VIX continues its upward trajectory, it could trigger further bearish sentiment on the Nasdaq.
Formula:
* VIX (rising) + DXY (stronger dollar) = Nasdaq bearish pressure.
Volume Analysis:
5. High Volume Sell-offs
* Significant volume spikes occurred during the 4-hour rejection at the 20,200 level, indicating large institutional sell-offs. High volume at key resistance levels often signifies institutional participation, further validating the bearish outlook.
Sentiment and Positioning Data:
6. Commitment of Traders (COT) Report
* The latest COT report shows a notable shift, with a net positive for short positions over longs, with 7,000 additional short positions. This sentiment aligns with the overall bearish outlook on Nasdaq, as institutions appear to be positioning for downside risk.
7. Greed Sentiment
* The greed sentiment index currently shows extreme greed in the market, which typically signals a contrarian move to the downside. When markets reach excessive greed, they are often primed for a correction, supporting our short position.
After negative news already in a bearish movement when their is a trigger towards fear is going up and after heavy greed occurred (like mini stock market crashes) Then market will only want to buy back (at the lowest level of fear) so stay focused on news events that can further drive down price in an already bearish sentiment
Trade Setup:
Entry:
* Sell Entry: 19,990.34
Take-Profit (TP):
* TP Target: 19,237.95
* Pip Distance: Approximately 752 pips.
Stop-Loss (SL):
* SL Level: 20,038.60
* Pip Distance: Approximately 48 pips above the entry.
Position Size:
* Account Size: R1500
* Lot Size: 0.1 lot, as each 40-pip move corresponds to R830. 1. U.S. Dollar Index (DXY)
* Buy Opportunity:
* Entry Trigger: If the price breaks above the recent resistance at 100.455 and the RSI moves above 50, this could confirm a bullish momentum.
* Stop Loss: Place below the recent support at 100.388.
* Take Profit: Target the next resistance level at 101.000.
* Sell Opportunity:
* Entry Trigger: If the price fails to break above resistance and drops below 100.388, with the RSI confirming a bearish trend, consider entering a sell.
* Stop Loss: Set above the resistance level.
* Take Profit: Aim for the lower support level around 100.200.
* 2. VIX (Volatility Index)
* Buy Opportunity:
* The VIX showing a breakout above its recent highs could signal increasing market volatility.
* Consider buying VIX options or ETFs if it approaches or exceeds 18.50.
* Sell Opportunity:
* If the VIX starts showing signs of rejection below 17.50, this could signal a return to stability, making it an opportunity to sell VIX positions.
Risk-Reward Profile:
The risk-to-reward ratio for this trade is highly favorable. Given the expected downside move and the strategic placement of the SL and TP, we are targeting a 1:15 risk-to-reward ratio, based on current technical setups and market sentiment.
Conclusion:
This Nasdaq short trade is supported by a combination of technical sell signals, macro fundamentals, and market sentiment data. The bearish scenario is reinforced by high volume sell-offs, overbought RSI conditions, rising DXY, and increased market volatility (VIX and ATR). Key economic events, such as the PMI and NFP, will play a pivotal role in determining the strength and duration of this trade.
Institutional participation and positioning data (COT) further suggest that the downside potential is significant. Based on these confluences, the trade offers a compelling risk-to-reward profile for a short position on Nasdaq this week.
Updates on Nasdaq as of Tuesday 1 October
- PMI results for the US ended coming our negative now the market has moved to its bearish momentum as expected on Tuesday
- Vix and DXY at highs
In 300 points on this short
This report outlines a potential short position on Nasdaq for the upcoming week, based on a confluence of technical indicators and macroeconomic data. Key economic releases such as PMI (Tuesday) and NFP (Friday) are expected to have significant market impact. A weak PMI report, indicating a slowdown in global manufacturing or supply chain issues, could fuel further bearish momentum for tech-heavy indices like the Nasdaq.
The trade setup is backed by more than six confluences, including technical sell signals, volatility measures, and fundamental macroeconomic indicators. The entry is targeted around 19,990.34, with a take-profit (TP) at 19,237.95 and a stop-loss (SL) at 20,038.60. This trade is powered by an expectation of significant moves driven by upcoming data and market sentiment.
Market Overview
Key Economic Events:
* PMI on Tuesday: A weak PMI could indicate a slowdown in global manufacturing and potentially push the Nasdaq lower.
ADP Employment Change (Sep)
Wednesday
Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
ISM Services PMI (Sep)
Thursday
A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the US Dollar (USD). A reading below 50 signals that services sector activity is generally declining, which is seen as bearish for USD
* NFP on Friday: Weak job data could confirm economic slowdown, driving further downside pressure on the Nasdaq.
The broader market sentiment shows increasing volatility, with global supply chain constraints and inflationary pressures impacting growth forecasts. If both the PMI and NFP data come out weaker than expected, this could lead to a sustained sell-off, extending the hold on our trade.
Technical Analysis:
1. 1H Sell Signal & 4H Rejection off Resistance
* 1H Chart: The EA has generated a sell signal on the 1-hour timeframe. We are awaiting further confirmation from the 4H rejection off resistance, which will strengthen the bearish case.
* 4H Chart: The 4-hour rejection off resistance level is crucial for reinforcing the short. If resistance holds, it could signal a substantial move to the downside.
2. RSI Overbought Condition on 4H
* The RSI on the 4-hour chart indicates that the market is overbought, suggesting potential for a pullback. The last significant overbought point led to a sell-off, with the entry expected around 19,990.34. The TP is set at 19,237.95, and the SL at 20,038.60. This equates to a move of roughly 752 points (or pips), calculated between the entry and TP levels.
3. Rising ATR (Volatility Indicator)
* The ATR is nearing a reading of 100, signaling that the market is becoming increasingly volatile. Such levels typically indicate sharp, aggressive moves ahead, likely coinciding with the NFP release on Friday. This supports a more volatile Nasdaq environment, conducive to significant price movements in our favor.
Fundamental Analysis (Macroeconomic Indicators)
4. Dollar Index (DXY) Impact
* DXY: A rising Dollar Index often places downward pressure on tech stocks in the Nasdaq, as a stronger dollar reduces overseas earnings. The DXY has bounced off of support and appears to be trending upwards, which could be confirmed after the next market open with a 1H buy signal from the EA. A bullish DXY will further reinforce the bearish outlook on Nasdaq.
* VIX (Volatility Index): Rising VIX levels indicate increased market uncertainty, which tends to lead to sell-offs in riskier assets like tech stocks. If the VIX continues its upward trajectory, it could trigger further bearish sentiment on the Nasdaq.
Formula:
* VIX (rising) + DXY (stronger dollar) = Nasdaq bearish pressure.
Volume Analysis:
5. High Volume Sell-offs
* Significant volume spikes occurred during the 4-hour rejection at the 20,200 level, indicating large institutional sell-offs. High volume at key resistance levels often signifies institutional participation, further validating the bearish outlook.
Sentiment and Positioning Data:
6. Commitment of Traders (COT) Report
* The latest COT report shows a notable shift, with a net positive for short positions over longs, with 7,000 additional short positions. This sentiment aligns with the overall bearish outlook on Nasdaq, as institutions appear to be positioning for downside risk.
7. Greed Sentiment
* The greed sentiment index currently shows extreme greed in the market, which typically signals a contrarian move to the downside. When markets reach excessive greed, they are often primed for a correction, supporting our short position.
After negative news already in a bearish movement when their is a trigger towards fear is going up and after heavy greed occurred (like mini stock market crashes) Then market will only want to buy back (at the lowest level of fear) so stay focused on news events that can further drive down price in an already bearish sentiment
Trade Setup:
Entry:
* Sell Entry: 19,990.34
Take-Profit (TP):
* TP Target: 19,237.95
* Pip Distance: Approximately 752 pips.
Stop-Loss (SL):
* SL Level: 20,038.60
* Pip Distance: Approximately 48 pips above the entry.
Position Size:
* Account Size: R1500
* Lot Size: 0.1 lot, as each 40-pip move corresponds to R830. 1. U.S. Dollar Index (DXY)
* Buy Opportunity:
* Entry Trigger: If the price breaks above the recent resistance at 100.455 and the RSI moves above 50, this could confirm a bullish momentum.
* Stop Loss: Place below the recent support at 100.388.
* Take Profit: Target the next resistance level at 101.000.
* Sell Opportunity:
* Entry Trigger: If the price fails to break above resistance and drops below 100.388, with the RSI confirming a bearish trend, consider entering a sell.
* Stop Loss: Set above the resistance level.
* Take Profit: Aim for the lower support level around 100.200.
* 2. VIX (Volatility Index)
* Buy Opportunity:
* The VIX showing a breakout above its recent highs could signal increasing market volatility.
* Consider buying VIX options or ETFs if it approaches or exceeds 18.50.
* Sell Opportunity:
* If the VIX starts showing signs of rejection below 17.50, this could signal a return to stability, making it an opportunity to sell VIX positions.
Risk-Reward Profile:
The risk-to-reward ratio for this trade is highly favorable. Given the expected downside move and the strategic placement of the SL and TP, we are targeting a 1:15 risk-to-reward ratio, based on current technical setups and market sentiment.
Conclusion:
This Nasdaq short trade is supported by a combination of technical sell signals, macro fundamentals, and market sentiment data. The bearish scenario is reinforced by high volume sell-offs, overbought RSI conditions, rising DXY, and increased market volatility (VIX and ATR). Key economic events, such as the PMI and NFP, will play a pivotal role in determining the strength and duration of this trade.
Institutional participation and positioning data (COT) further suggest that the downside potential is significant. Based on these confluences, the trade offers a compelling risk-to-reward profile for a short position on Nasdaq this week.
Updates on Nasdaq as of Tuesday 1 October
- PMI results for the US ended coming our negative now the market has moved to its bearish momentum as expected on Tuesday
- Vix and DXY at highs
In 300 points on this short
Exención de responsabilidad
La información y las publicaciones que ofrecemos, no implican ni constituyen un asesoramiento financiero, ni de inversión, trading o cualquier otro tipo de consejo o recomendación emitida o respaldada por TradingView. Puede obtener información adicional en las Condiciones de uso.