Nasdaq and S&P 500 Test Key Trend
The indices are dipping into key "make or break" areas.
Late last week we saw some weakness across the board, with a selloff on Thursday followed by a strong rebound late in the day and then a continuation higher on Friday.
It didn’t look like that was going to be the case, but as usual, those sneaky late-week bulls jammed it up and gave a nice trade into the weekend.
Are we seeing some waning momentum though?
Trading the S&P 500
The action has been choppy all week, which depending on the trader, is either a great thing and they should strike while the iron is hot or it’s a terrible thing and they should go enjoy a few days in the sun and regroup.
Specifically, I am looking at Thursday’s range. A sustainable break over the high at 4369 could open the door to the highs near 4393 and thus put 4400 in play.
A break of Thursday’s low isn’t the end of the world, but it could spell a bit more downside. Thursday’s low is also this week’s low, which comes into play near 4340. If it fails, that first puts the 21-day moving average in play near 4300, followed by last week’s low at 4289.
Below that and a retest of the prior trend and the 10-week moving average is in the cards. Don’t overcomplicate it and let a bias get in your way. Just trade the path of least resistance.
Now for the Nasdaq
Above is a chart of the Nasdaq futures (NQ), but it’s a similar setup for the QQQ and the Nasdaq. And really, it’s a similar setup as the SPX.
If the NQ can gain some upside momentum, it puts that 15,000 level back in play. Remember, earnings from FAANG are just around the corner.
If a break of Thursday’s low sticks, it could trigger a move down to the 14,600 area, followed by the 21-day moving average. Below that and a retest of prior trend resistance and the 10-week moving average is possible.
Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.