This is the level we have been watching for so long on the daily chart for the NQ Emini and one that has finally been breached and as a result, cleared the way for the index to climb higher and develop a sustained bullish trend. The level I am referring to is 7960, which is denoted with the heavy red dashed line of the accumulation and distribution indicator for NinjaTrader, which not only describes these areas, but also paints them in increasing thickness (the more a level is tested and holds firm). This was an area that was repeatedly tested in the past and therefore presented very solid technical resistance to any advance. However, as a result of Friday’s pivotal price action, the week ended with a close above this level on good volume allowing the index to break out from its longer-term congestion.
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Monday’s price action confirmed this bullish sentiment with a second up candle on good volume and with a solid platform of support now in place, we can expect to see a resumption of the longer-term bullish trend develop for equity markets in the U.S. Note also the trend monitor indicator, which supports and confirms the bullish sentiment in this timeframe and with a low volume node ahead on the volume point of control indicator, the outlook is positive as risk-on sentiment continues to prevail.
From a fundamental perspective, market participants are now awaiting Wednesday’s FOMC and whether the FED lowers interest rates once again thereby giving markets a further injection of bullish intent.
The NQ is an index David and I follow closely in our free weekly webinars.