NQ Emini Leads The Way Once Again
Anna Coulling | Apr 28, 2017 06:27AM ET
For those students of the market who are widely read, the words of Jesse Livermore are never more apposite than at present, and I am reminded of his quote which is simply this: ‘No market is ever too high to buy or too low to sell.’
As the NQ emini continues its remorseless rise ever higher, the usual crop of analysts and experts are emerging to suggest this market is completely disconnected from everyday reality (which it probably is), and bears no relationship to the economic picture. And the corollary to this is that the big short is just around the corner.
Well I have to disappoint, but this is not the case, and for confirmation and evidence of this we need look no further than the relationship between volume and price, and as any student of Wyckoff will know, the precursor to the bear market will be some climactic price action as the selling climax develops, prior to any major reversal. This will be coupled with a dramatic rise in volume, with the price action reflecting volatility, driven by news events and leveraged by the market makers accordingly. To date this has not yet appeared.
This week’s price action has been significant, with the NQ emini once again leading the US markets higher and breaking into ever higher new ground and moving strongly away from the congestion phase which saw the index oscillate around the volume point of control in the 5370 area. The solid trend higher supported by average volume confirms the bullish sentiment with the index rising quickly through the low volume node at 5510 and closing yesterday’s price action with a wide spread up candle and testing the 5600 region.
What is particularly interesting at present is that fact that the NQ is once again the leader of the pack, with both the YM emini and the ES emini yet to break out into new high ground on their equivalent daily charts. Indeed whilst the price action for the NQ has been very bullish, the YM emini, and to a lesser extent the ES emini have been mildly bearish and moving into short term congestion phases.
Get The News You Want
Moving to the daily chart for the ES emini, the key level here is in the 2400 area, with any move through this level then confirming the bullish sentiment signalled on the NQ emini, with the volume point of control anchored firmly below in the 2345 area.
This picture is also mirrored on the YM emini daily chart, with the 21113 high of March 1st setting the level here.
And no analysis would be complete without a check on the VIX which is once again approaching the floor of support in the 10.50 area, and with the potential to finally break through and move into single figures. Any such move will then signal further bullish momentum, but of course, as complacency develops, the prospect for the big short then increases.
However, as always, it is no surprise to see the NQ emini leading the way, given the US economy is now developing an early expansion phase of economic growth, with the technology sector likely to perform well in this period. So remember the wise words of Jesse, and assuming some cataclysmic event does not overwhelm the market, such as Donald Trump’s Twitter account being hacked, the outlook for US equities continues to remain bullish for the time being, with the big short on hold for now.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.