#202511 - priceactiontds - weekly update - nasdaq e-mini futures
Good Evening and I hope you are well.
comment: Let’s take this from the weekly chart. Market has not dipped below the 2024-09 low but that was way too much to expect for bears. 14% down in 4 weeks straight selling is beyond unsustainable but it’s also very very unlikely that this was it and we just go up again. My thesis is a new bear trend until proven otherwise. How would bulls do that? Anything above 21100 would be too high for a retracement in a strong bear trend and it would likely fit a trading range narrative. Trading range would mean 2024-04 low at 17900 to 2024-12 ath at 22450. Bear trend is drawn on the chart and would lead to at least the 50% retracement of this bull trend since 2022, down to around 17500. When will we know? If market retraces below or to the 50% around 20400 and strongly reverses down again, I see my theory confirmed so far. For next week I can’t see anything but a big short squeeze to trap late bears. 19140 was such a weird place to reverse and I can only see this already being strong bulls buying the dip and trapping everyone who thought we were going for 19000.
current market cycle: strong bear trend but pullback expected
key levels: 19140 - 20500
bull case: Bulls have only going for them that this selling is beyond overdone and climactic and Friday' was a very strong bullish day on huge volume. My bear target was 19600 and we almost printed 19000. 20000 is the first obvious target for a pullback but I think a 50% retracement to 20700 is doable, since the daily 20ema is also at 20400. I expect the market to fight the real battle for either the new bear trend or a multi-year trading range around 20000.
Invalidation is below 19100.
bear case: Bears showed more strength and got below my measured move target of 19600 but failed above the 2024-09 low at 18867. Last time bears made this much money was 2024-07 where we corrected for 16.91% to then rally 25.59% higher over the next 19 weeks. Hand on heart I do think it’s much more likely we will see that pattern from 2024 repeated than a new bear trend. A trading range 19000 - 22450 is much more likely than going down to 16000. As of now. Can this change if the US really goes into a bigger recession? Of course but for now this is front-running the possible risk because we got up so much the past years that funds really need to secure some profits this time. For next week I have absolutely nothing for the bears. This selling is overdone and market is so much more likely to squeeze late bears, that I won’t look for any short trades until we see 20000 or higher.
Invalidation is above 21100.
short term: Heavy bullish bias for 20000 and likely 20400. Above 20500 air would get real thin again, if this was the start of a bear market. For now I think the pattern from 2024-07 is more likely to repeat than the bear trend as drawn on the chart.
medium-long term - Update from 2024-03-16: My most bearish target for 2025 was 17500ish, given in my year-end special. We don’t know if we have printed the W1 of the new bear trend or repeat the pattern from 2024, where we sold of very strong to reverse even more strongly and make new all time highs. Market needs a bounce and around 20000/20500 we will see the real battle for the next weeks.
current swing trade: None
chart update: Updated the possible bear trend and added a bullish alternative to show what we did in 2024. For now the bullish path is more likely.
comment: Let’s take this from the weekly chart. Market has not dipped below the 2024-09 low but that was way too much to expect for bears. 14% down in 4 weeks straight selling is beyond unsustainable but it’s also very very unlikely that this was it and we just go up again. My thesis is a new bear trend until proven otherwise. How would bulls do that? Anything above 21100 would be too high for a retracement in a strong bear trend and it would likely fit a trading range narrative. Trading range would mean 2024-04 low at 17900 to 2024-12 ath at 22450. Bear trend is drawn on the chart and would lead to at least the 50% retracement of this bull trend since 2022, down to around 17500. When will we know? If market retraces below or to the 50% around 20400 and strongly reverses down again, I see my theory confirmed so far. For next week I can’t see anything but a big short squeeze to trap late bears. 19140 was such a weird place to reverse and I can only see this already being strong bulls buying the dip and trapping everyone who thought we were going for 19000.
current market cycle: strong bear trend but pullback expected
key levels: 19140 - 20500
bull case: Bulls have only going for them that this selling is beyond overdone and climactic and Friday' was a very strong bullish day on huge volume. My bear target was 19600 and we almost printed 19000. 20000 is the first obvious target for a pullback but I think a 50% retracement to 20700 is doable, since the daily 20ema is also at 20400. I expect the market to fight the real battle for either the new bear trend or a multi-year trading range around 20000.
Invalidation is below 19100.
bear case: Bears showed more strength and got below my measured move target of 19600 but failed above the 2024-09 low at 18867. Last time bears made this much money was 2024-07 where we corrected for 16.91% to then rally 25.59% higher over the next 19 weeks. Hand on heart I do think it’s much more likely we will see that pattern from 2024 repeated than a new bear trend. A trading range 19000 - 22450 is much more likely than going down to 16000. As of now. Can this change if the US really goes into a bigger recession? Of course but for now this is front-running the possible risk because we got up so much the past years that funds really need to secure some profits this time. For next week I have absolutely nothing for the bears. This selling is overdone and market is so much more likely to squeeze late bears, that I won’t look for any short trades until we see 20000 or higher.
Invalidation is above 21100.
short term: Heavy bullish bias for 20000 and likely 20400. Above 20500 air would get real thin again, if this was the start of a bear market. For now I think the pattern from 2024-07 is more likely to repeat than the bear trend as drawn on the chart.
medium-long term - Update from 2024-03-16: My most bearish target for 2025 was 17500ish, given in my year-end special. We don’t know if we have printed the W1 of the new bear trend or repeat the pattern from 2024, where we sold of very strong to reverse even more strongly and make new all time highs. Market needs a bounce and around 20000/20500 we will see the real battle for the next weeks.
current swing trade: None
chart update: Updated the possible bear trend and added a bullish alternative to show what we did in 2024. For now the bullish path is more likely.
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.