NQ/QQQ Weekly Levels & Trade Preparation (Feb 20-24)

Feb 20, 2023

The Nasdaq 100 gained 0.35% last week after trading within a 1 week range of 520 points. The price closed above the 21/55 EMAs and 200 SMA but below the 9 EMA once again. The NQ has now completed two inside weeks after breaking above the long-term downward trend line. Currently, it is consolidating in a broader range of 600 points above the December 12th high. If the Dec 12th high support level is broken, the NQ is likely to drop to the 200 SMA/trendline zone. However, if the support level holds, the NQ may move back up to recent highs and 786 Fibonacci Retracement. The current high volume of zero DTE options has caused significant price swings so breaking out of the current range could lead to either a massive rally or sell-off. This week, data releases include GDP, FOMC Minutes, and PCE. Earning season continues with reports from companies such as HD, NVDA, WMT, SQ, COIN, TOL, and BABA. Sector strength is mixed and volatile. XLE dropped back 6%, while XLY and XLU both gained over 1% last week.

As usual I will update this chart during the week. Please like, share my post if you find it helpful or interesting. Comments are welcome. Thankyou and trade well.

• Nasdaq posted a 0.35% gain last week after trading in a range of 520 points
• Price closed above the 21/55 emas & 200 sma, but closed below the 9 ema once again.
• NQ has just completed two inside weeks after the break of the long-term downward trend line.
• NQ is consolidating in a 600pt range just above the important Dec 12th high breakout level.
• A move down to the 200 sma/trendline support is likely if the Dec 12th high support is broken.
• If the Dec 12th high support holds a move back up to the recent highs and 786 Fib RT is possible
• Another heavy week of econ data is due out this week including GDP, FOMC Minutes & PCE.
• Earnings continues with highly followed reports from HD, NVDA, WMT, SQ, COIN, TOL & BABA
• Relative strength from S&P Sectors was mixed with XLE dropping back 6% and XLY & XLU both gaining > 1%
• High volume of zero DTE options is creating wild 2 way price action as seen with the multiple 100% price swings the past few weeks.
• A break from the current 600 point range could lead to either a massive rally or sell off depending on the catalyst.
• NQ is seasonally weak the second half of Feb to early Mar.

WEEKLY EVENTS

Monday US Market Closed
Tuesday US S&P PMI Flash, US Existing Homes Sales
Wednesday FOMC Minutes & Fed’s Williams Speaks
Thursday US Initial Jobs Claims, US GDP Estimate, US PCE Prelim. & EIA Crude Inventories + Fed’s Bostic Speaks
Friday US Consumer Spending, US PCE, US New Homes Sales & University of Mich. Sentiment

NOTABLE EARNINGS

Monday US Market Closed
Tuesday CHK, COIN, CZR, FANG, HD, IR, MDT, PANW, PSA, RBA, TOL, WMT, O
Wednesday BIDU, EBAY, ETSY, IQ, LCID, NVDA, RIO, TDOC, TJX, TNL, U, WING
Thursday ADSK, BABA, BHC, CWK, DPZ, EIX, DISH, EOG, GPC, INTU, KDP, MRNA, MNST, NEM, PLNT, PZZA, SQ, VIPS, W, YETI
Friday BRK.B, CM

BULLISH NOTES

NQ above 21/55 emas and 200 SMA
NQ above descending trend line
NQ above Dec 12th breakout high
Current pattern may be seen as large bullish flag
Potential positive reaction to FOMC minutes & PCE
Potential positive reaction to earnings

BEARISH NOTES

NQ closed below 9 ema
NQ rejected at the HTF 382 Fib RT
10 year Yield rising again
DXY is bouncing off longer term support
Potential 200 SMA price magnet
Potential negative reaction to FOMC minutes & PCE
Potential negative reaction to earnings
Seasonally bearish towards end of February

Feb 21, 2023

Note

NQ opening up down 140 pts Tuesday. Setting up for a measured move/compound correction into the 200 sma if the Friday low does not hold.

Feb 21, 2023

Note

Broke down but nearing false breakdown level (1.13X) If the break down is false it should reject here. If not its likely to continue lower.

Feb 22, 2023

Note

The NQ breakdown confirmed as the 1.13 FibX did not hold. Move continued straight to the target level of 200 SMA / 1.127 FibX. Treating this as support until it's not. If support breaks next level to the downside is the trendline and 1.618 FibX.

Feb 23, 2023

Note

Eventually found support at the 200 sma/ 1.272 Fib X. Pushing back up into the daily 21 ema pre cash session. Strong earnings from NVDA is supporting the NQ right now. A move back into the Dec 12 high is possible. A rejection at the 21 ema could send price back down to retest 200. PCE data due out tomorrow.

Feb 23, 2023

Note

So it was the rejection at the 21 ema. Back near the 200 now. 200 sma needs to hold for bullish continuation. If the level breaks price will likely drop to the 1. 618 Fib X and downward trendline.

Feb 24, 2023

Note

NQ had a wild reversal into the close yesterday but has now retraced more than 100% of the up move after the PCE data drop. Now trading below the 200 SMA and 1.272 Fib X. Down side target is the grey box at the trendline and 1.618 Fib X.
Be prepared for an early short covering bounce at the cash open before any move lower. Failure to fill less that 50% of the overnight gap would be bearish. Above 50% look for full gap fill.