QQQ / NDX May Fail at Resistance Yet Again 288-290

Updated

This video provides a brief update of recent price action in / / .

The key level to watch tomorrow and next week on QQQ will be 288-290. The video explains why. There is a confluence of resistance levels at this point, including Fibonacci, 21-day EMA, and downtrend line resistance.

The .618 retracement of the June 27-30 decline lies at the following level:

QQQ: 288.63
NDX: 11,850.09
E-mini NQ futures: 11,914

The 21-day EMA lies near this same level:

QQQ: 288.20
NDX: 11,827.86
E-mini NQ futures: 11,848.25

The .50 retracement of the entire rally from March 2020 lows to November 2021 highs = 286.82. On NDX, this level = 11,768. Interestingly, this is right where the Nasdaq / QQQ closed today, July 5, 2022.

Note that RSI is also at a very firm resistance level in the range of 50-54. See the level in blue on my RSI indicator in the subgraph below price.

Other key levels are discussed in the video. Please leave a like / comment if you found it helpful. Have a great week.

Note

NDX has been the outperformer among all the major indices in the US today. It's showing good relative strength compared to SPX and RUT and DJI. Could this be because of recession fears? It's interesting to me that NDX / QQQ is outperforming *despite* the 10-year yield rising significantly today off yesterday's lows.

Note, however, that NDX / QQQ got rejected on it's first test of the trendline in blue. This is also within pennies of the .618 R of the 6/27-6/30 wave of decline at 288.63.

FOMC minutes from June will be released later today. That could cause markets to move in one direction or the other.

Note

Here is the chart showing where NDX is getting rejected so far.

We will see if a retest happens again later

Note

The retest of the downtrend did in fact occur in the final hour of trading. While pushing slightly above the downtrend line, QQQ has showed stalling action at the .618 retracement of the 6/27-6/30 swing high to swing low.
After making progress above this line at 288.63 on QQQ, NDX gave up most of those gains as shown by the significant upper shadow (or wick) on today's candle. It closed just a few cents above 288.63. Tomorrow and Friday will likely indicate whether this level can hold.

Note

RSI remains at resistance on the daily chart despite the substantial push higher today on the Nasdaq

Note

SQQQ, an inverse Nasdaq-100 ETF, held its uptrend line in the expected mirrored inverse relationship to QQQ.

Note

Price has pushed above the trendline and key Fibonacci range 288-290. This happens, and honestly, it could be whipsaw. But until there is more clarity, any bearish positions should be exited while price is beyond this "point of invalidation" on NDX / QQQ.

Price may not close above the trendline, or it may reverse lower in a day or two, we don't know. The higher probability path of a reversal at the trendline did not play out. So it's best to exit. It's usually almost cost-free to re-enter a trade later if the setup re-emerges and price reverses back below these key levels.

Note

Price just broke back below the 8-day EMA and 21-day EMA. This appears to be a bearish signal heading into CPI on Wednesday this week. But anything can happen in markets, and price broke above the trendline mentioned earlier in this post, which seemed like the less likely price path.

Additionally, look at where price stalled two times now (blue arrows). Price stalled two times now at the .618 R of the last major swing high to low (6/8-6/16). A TV member today showed me how these two failures at the .618 R also constitute double top potentially, so kudos to alexbourne88 for catching this!

Double tops don't always work, as with any price pattern with an "expected" outcome, so I'm staying open to what price action / indicators continue saying.

Note

NDX / QQQ chopping around two key levels that coincide.

Note

Here are the levels (purple line in the updated chart above):
286.58 — .382 R of the 6/2-6/16 decline (selloff in 1H June)
286.41 — .382 R of the recent decline starting from the swing high on 6/8.
We will see how price responds to them. PA is extremely choppy post CPI report.

Note

Check out a new post on NDX / QQQ that covers these Fib levels in more detail.

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