The NQ Emini futures contract on the daily chart is once again approaching a delicate tipping point from a technical perspective and all clearly signaled through the prism of volume price analysis.
The first sign arrived on Columbus Day with a rally which saw the index climb rapidly on a national holiday, which is suspicious in itself, and was followed the day after with an attempt to rally on the same volume which eventually closed on a candle with a deep wick to the upper body. Wednesday saw a further effort to rally but which once again failed to hold. Thursday’s price action saw some buying which came in at the end of the session. However, the index closed lower once again, before Friday confirmed the week’s fragile picture with yet another effort to rise before closing out on a candle with a deep wick to the upper body on good volume.
Today’s price action has added further to the structural weakness now developing with yet another failed rally. The question now is where is the index likely to find any support and from a price based perspective there is very little with only one minor region at 11,480 and denoted with the red dashed line. More likely is a return to the volume point of control defined with the yellow dashed line at 11,270 and where the index congested for much of September.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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