NAS/QQQ Weekend Look (Mar7-11)

Here is the weekend look at the NAS/QQQ for the week of Mar 7-11. We just wrapped up another week of choppy and volatile price action. Price is currently stuck in a range between 14350 and 13700. On Thursday the NAS broke briefly above the 21 ema and threated to break above the downward trendline, but quickly rejected. Price closed down 1.5% on Thursday and dropped another 1% or so on Friday, but did not take out the 13706 level.

We will begin this week in the middle of the sideways range. The tape is very hard to read and difficult to trade. Price may continue its sideways chop or break higher or lower. Key levels to watch are the 13706 to the down side and 14250 to the upside. If price breaks lower expect a test of the Feb 24th low at 13000. If price breaks higher through the 21ema and bottom of the neutral (red box) expect a move into the 200sma.

The NAS continues to be in a down trend and my bias remains bearish. The challenge is that in this volatile environment any positive news could cause and explosive move higher. The only way to limit risk in this situation is to focus on day trades. Any stock or instrument held over night is subject to massive gap risk. For this reason almost all my trading activity has been focused on the futures market. For day trades in stocks (if you do not trade futures) I would focus on Growth names for shorts and the XLE, XLP & XLU sectors for longs as well as precious metals. The indexes remain weak due to the drop in the highly weighted Mega caps names, but there is a lot of underlying strength in the less weighted sectors I listed above.

This is a tough period to trade. I recommend smaller and shorter time frame trades. This is not a time to go in heavy as you can get your face ripped off at any time by a big unpredictable reversal.

Data on Wed/Thursday will be key this week. Watch Crude Inventories and the CPI data.



Weekly Events...

Monday...
Tuesday... International Trade Earnings from: DKS, WTI, YEXT
Wednesday... Crude Inventories Earnings from: THO, CRWD, MQ
Thursday... ECB Interest Rate, US CPI, US Jobless Claims Earnings from: AG, JD, BLNK, DOCU, ORCL, RIVN, WPM, ULTA
Friday... University of Mich. Sentiment Earnings from: BLDP


Bullish Notes:

Oversold conditions
21ema within striking distance
Possible positive news swing
CPI print hints and peak inflation
Positive earnings momentum


Bearish Notes:

Ukraine crisis worsens
13000 level is tested
CPI print is very high
Continued spike in OIL

Comentarios:

Dropped below the 13706 level overnight. Price action during the cash session is much more important than the overnight session so the move below 13706 overnight does not confirm lower unless the over night low is taken out during the day. Key pivots marked with the red arrows.

Comentarios:

Took out the overnight low yesterday and sold off as expected. Price as come close to the Feb 24th low in the overnight session today. I'll be watching the the Feb 24th low for an under cut and a move to the bottom of the green box and the lower trendline.

Comentarios:

Top of the green box was not tested as traders front ran the zone leading to a big relief rally on Wed back into the 9 ema. Price has pulled back overnight. Break of the recent high should take us up the 21 ema. If price falls continue to watch the lower trendline for support.