SELL ON NASDAQAs you can notice on the chart, the price has reached a high LQ level in which you can sell in a safe position.
Set you EN, TP and SL ans on the chart!
Follow for more.
Nasdaqfutures
SELL ON NASDAQYou can sell on NASDAQ after that we have a BB with the SL and TP as shown on the chart.
Options Blueprint Series: All-Time High Christmas Tree SpreadIntroduction
As Nasdaq futures continue to show bullish momentum, traders are eyeing the potential for a new all-time high. With market conditions favoring upward movements, leveraging options strategies that maximize upside potential becomes crucial. One such strategy is the Christmas Tree Spread, traditionally used to limit risk while maintaining profit potential. However, in this article, we will explore a modified version where all strikes are Out-Of-The-Money (OTM), creating a setup that profit to the upside no matter how high Nasdaq goes. This approach aligns perfectly with the optimistic outlook for Nasdaq futures and sets the stage for potential gains.
Strategy Overview
The Christmas Tree Spread is a versatile options strategy that can be tailored to suit various market conditions. Traditionally, when using calls, it involves buying one call at a lower strike price and selling three calls at higher strike prices and buying two more calls at even higher strike prices, creating a balanced risk-reward profile. In this modified version, we adjust the strikes to all be Out-Of-The-Money (OTM), enhancing the bullish nature of the strategy.
For this setup, while Nasdaq Futures are trading at 19,982.75, we select the following strike prices for Nasdaq futures options with an expiration date of September 2024:
Buy one 20000 call
Sell three 21500 calls
Buy two 21750 calls
By choosing these strikes, we position ourselves to benefit from any substantial upward movement in Nasdaq futures. All strikes being OTM ensures that the breakeven point is set above the current price, effectively betting on a new all-time high for Nasdaq. This configuration guarantees profit to the upside, regardless of how high Nasdaq futures rise.
Strategy Rationale
The rationale behind selecting an all OTM strike setup for the Christmas Tree Spread lies in the current bullish outlook for Nasdaq futures. As markets exhibit strong upward trends, the potential for Nasdaq to achieve new all-time highs becomes increasingly plausible. This strategy aims to capitalize on such a possible bullish scenario.
Why OTM Strikes?
Lower Cost: OTM options are generally cheaper, reducing the initial cost of setting up the spread.
Increased Profit Potential: Since all strikes are set above the current market price, the profit potential is maximized for any substantial upward movement.
Risk Mitigation: The structure of the spread inherently limits risk, as losses are capped while allowing for upside gains.
Breakeven Point: The breakeven point for this modified Christmas Tree Spread is calculated based on the premiums paid and received for the options. Given the strikes selected (20000, 21500, and 21750), the breakeven point is above the current E-mini Nasdaq-100 futures price (20,465.62), aligning with the expectation of a new all-time high.
Detailed Setup and Example Trade
Setup Details:
Buy one 20000: This is the lower strike option, purchased to gain exposure to significant upside potential.
Sell three 21500 calls: These are the middle strike options, sold to offset the cost of the purchased call and to create a spread.
Buy two 21750 calls: These are the higher strike options, purchased to cap the potential loss from the sold calls and complete the spread.
Premiums Involved: Assuming the following hypothetical premiums:
20000 call: 683.38 points
21500 calls: 145.42 each (436.26 total for three)
21750 calls: 109.25 each (218.5 total for two)
Net Cost:
Total cost of buying calls: 683.38 (20000 call) + 218.5 (21750 calls) = 901.88
Total premium received from selling calls: 436.26 (21500 calls)
Net cost: 901.88 – 436.26 = 465.62
Risk Profile and Reward-to-Risk Ratio:
Maximum Risk: The maximum risk is limited to the net cost of the trade, which is 465.62 points.
Maximum Reward: The maximum reward would take place at 21500 on expiration and is 1034.39 points. The structure ensures 534.39 points of profit as the index potentially climbs higher.
Breakeven Point: The breakeven point is the initial cost added to the lower strike price, which is 20000 + 465.62= 20,465.62.
Trade Scenario: To illustrate, let's consider the potential outcomes at expiration in September 2024:
If Nasdaq is below 20000: All options expire worthless, and the net loss is the initial cost: 465.61 points.
If Nasdaq is at 21500: The 20000 call gains 1500, the 21500 calls expire worthless, and the 21750 calls expire worthless. Net gain = 1500 - initial cost = 1034.39 points.
If Nasdaq is at or above 21750: The 20000 call gains 1500, two of the 21500 calls each lose 250, and the 21750 calls expire worthless. Net gain = $1500 - 750 (total loss from sold calls) – 465.61 (initial cost) = 534.39 points.
Risk Management
Risk management is a crucial aspect of any trading strategy, especially when dealing with options. For the modified Christmas Tree Spread strategy on E-mini Nasdaq-100 futures options, several risk management techniques can be employed to ensure that potential losses are minimized and profits are protected.
Use of Stop-Loss Orders:
Stop-Loss: Implementing stop-loss orders can help limit losses if the market does not move as expected. Setting a stop-loss at a certain percentage below the purchase price can automatically exit the position, reducing the risk of holding losing trades.
Hedging Techniques:
Protective Puts: Purchasing protective puts can provide additional downside protection if the market moves significantly against the position. This can be considered if there are signs of a strong bearish reversal.
Spreading Risk: Diversifying the strike prices or expiration dates can spread the risk and reduce the impact of a single adverse market movement. However, this needs to be balanced with the strategy's intent and market conditions.
Avoiding Undefined Risk Exposure:
Capped Risk: The strategy inherently caps risk by buying the 21750 calls, which limits the maximum loss from the sold 21500 calls. Ensuring that all components of the strategy are correctly implemented and monitored helps avoid unexpected risks.
Regular Monitoring: Regularly reviewing the position and market conditions ensures that the strategy remains aligned with the trader’s expectations and risk tolerance. Adjustments can be made as necessary to manage exposure.
By incorporating these risk management techniques, traders can enhance the robustness of the modified Christmas Tree Spread strategy, ensuring that potential losses are minimized while maximizing the chances of achieving the desired profit.
Application with Micro E-mini Nasdaq Options
The modified Christmas Tree Spread strategy can also be effectively applied to Micro E-mini Nasdaq futures options. Micro E-mini options offer the same strategic benefits but with smaller contract sizes (10 times less), making them more accessible for traders with smaller accounts or those looking to manage risk more precisely.
Advantages of Using Micro E-mini Options:
Lower Capital Requirement: The smaller contract size of Micro E-mini options means a lower initial cost, making it easier for more traders to participate.
Fine-Tuned Risk Management: Smaller positions allow for more precise control over risk, as traders can scale in and out of positions more easily.
Similar Profit Potential: While the absolute profit may be smaller compared to standard E-mini options, the percentage returns can be similar, providing an effective way to capture upside movements in E-mini Nasdaq-100 futures.
Comparison of Standard E-mini vs. Micro E-mini Options: Standard E-mini options have larger contract sizes and are typically used by traders with more significant capital to invest. In contrast, Micro E-mini options offer smaller contract sizes, making them ideal for traders with smaller accounts or those who prefer to manage risk more precisely. Both options provide the same strategic advantages but cater to different levels of investment and risk management needs.
Using Micro E-mini Nasdaq futures options provides traders with the same strategic advantage of capturing significant upside potential while managing risk effectively, aligning well with the bullish market outlook for E-mini Nasdaq-100 futures.
Conclusion
The modified Christmas Tree Spread strategy offers a robust and flexible approach to capitalizing on the bullish momentum of E-mini Nasdaq-100 futures. By strategically placing all strikes Out-Of-The-Money and targeting a new all-time high, this setup ensures profit potential to the upside, no matter how high Nasdaq climbs. With proper risk management and precise execution, traders can maximize their gains while minimizing risks. Whether using standard E-mini options or Micro E-mini options, this strategy provides a powerful tool for navigating the current market conditions and positioning for future growth.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
Options Blueprint Series: The Collar Strategy for Risk ReductionIntroduction to Nasdaq Futures
Nasdaq Index Futures offer traders exposure to the Nasdaq-100 index, a benchmark for U.S. technology stocks, without directly investing in the index's component stocks. Trading on the Chicago Mercantile Exchange (CME), Nasdaq Futures provide a critical tool for managing market exposure on the future of technology and biotech sectors.
Key Contract Specifications:
Point Value: Each point of the index equates to $20 per contract.
Margins: As determined by the CME, margins vary, reflecting the volatility and current market conditions. As of the time of this publication the CME website shows a maintenance margin of $17,700 per contract.
Trading Hours: Nearly 24-hour trading capability, aligning with global market hours to provide continuous access for traders.
It's important to note that similar strategies and benefits are available with Micro Nasdaq Futures , which are scaled down to a tenth of the standard Nasdaq Futures, making them accessible to a broader range of traders due to their lower margin requirements (Margin is 10 times less, point values are 10 times less, etc.)
Basics of the Collar Strategy
The Collar strategy is a risk management tool used by traders to protect against large losses in their investments while also capping potential gains. It is particularly useful in volatile markets or when significant price swings are expected but their direction is uncertain.
Components of the Collar Strategy:
Own the Asset: Typically involves owning the underlying asset, but in the case of futures, it involves holding a long position in the Nasdaq Futures contract.
Buy a Protective Put: This put option gives the right to sell your futures contract at a predetermined strike price, serving as insurance against a significant drop in the market.
Sell a Covered Call: This call option grants someone else the right to buy your futures contract at a set strike price, generating income that can offset the cost of the put option, but it limits the profit potential if the market rises sharply.
This strategy forms a price collar around the current value of the futures contract, protecting against drastic movements in both directions. The use of this strategy in Nasdaq Futures trading can be especially effective given the index's exposure to high-growth, high-volatility sectors.
Application to Nasdaq Futures
Implementing the Collar strategy with Nasdaq Futures involves selecting the right put and call options to effectively hedge the position. Here's how you can set up this strategy:
Choose the Underlying Contract: Decide whether to use standard E-mini Nasdaq-100 Futures or Micro mini Nasdaq-100 Futures based on your investment size and risk tolerance.
Select the Put Option: Identify a put option with a strike price below the current market price of the Nasdaq Futures. This strike should represent the maximum loss you are willing to accept. The graphics of this article show UFO Support Price Levels below which accepting a larger loss could be seen as a form of hope. Using UFO Support Price Levels as a reference to select the Put strike could be an efficient manner to determine the desired risk.
Choose the Call Option: Pick a call option with a strike price above the current market level, where you believe gains will be limited. The premium received from selling this call helps offset the cost of the put, reducing the overall expense of the setup. Selecting a call with its premium equal to the put price would allow for the Collar strategy to be cost-free (not risk-free).
Risk Profile Visualization: A graphical representation of the risk profile will show a flat line of loss limited to the downside by the put and capped gains on the upper side by the call. This visualization helps traders understand the potential financial outcomes and their likelihood.
Forward-Looking Trade Idea
Considering the recent market dynamics, Nasdaq Futures have been experiencing a range-bound pattern after reaching all-time highs. With current geopolitical tensions such as the recent conflict between Iran and Israel, there's a potential for sudden market movements.
Scenario Analysis:
Continuation of Uptrend: If the market breaks above the range, selling the covered call may yield limited gains but will provide premium income.
Significant Drop: If the market drops due to intensified conflicts, the protective put limits the potential loss, safeguarding the investment. That is knowing that if the market was to rebound after a significant drop, the strategy could end up as profitable as long such rebound would happen prior to the Options expiration date.
Trade Setup:
Entry Point: Current market price of Nasdaq Futures.
Put Option: Select a put option below the current market price. The chart example uses the UFO Support Level located around 18,000. Premium paid for the 18,000 Put is estimated to be 511.79 points * $20 ($10,235.8).
Call Option: Choose a call option above the current market price targeting the same level of premium as the premium paid for the put. The 18,300 Call is estimated to provide 522.65 points * $20 ($10,453).
Expiration: Options with a 1-3 month expiration to balance cost and protection level. This trade example uses June Expiration which is 67 days away from expiration.
As seen on the above screenshot, we are using the CME Options Calculator in order to generate fair value prices and Greeks for any options on futures contracts.
This setup aims to utilize the Collar strategy to navigate through uncertain times with controlled risk, taking into account both the potential for continuation of the uptrend and a protective mechanism against a sharp decline.
Risk Management Discussion
Effective risk management is crucial when trading futures and options. The Collar strategy inherently incorporates risk management by design, but understanding and applying additional risk control measures is essential for successful trading.
Key Risk Management Techniques:
Limited Risk: By default, the Collar strategy is a limited risk strategy where the risk is calculated by looking at the current Nasdaq Futures price compared to the Put strike price and adding or subtracting the Collar execution price for a debit or credit respectively.
Use of Stop-Loss Orders: Although the Collar strategy provides a natural hedge, setting stop-loss orders beyond the put option's strike can provide an extra safety net against gap risk and extraordinary market events.
Regular Review and Adjustment: As market conditions change, the relevance of the chosen strike prices may alter. Regularly reviewing and adjusting the positions to ensure they still reflect your risk appetite and market outlook is advised.
Diversification: While the Collar strategy protects an individual position, diversifying across different asset classes can further protect the portfolio from concentrated risks associated with any single market.
Conclusion
The Collar strategy offers Nasdaq Futures traders a structured way to manage risk while maintaining the potential for profit. By capping potential losses with a protective put and limiting gains with a covered call, traders can navigate uncertain markets with increased confidence. This strategy is particularly applicable in volatile markets or during periods of geopolitical tension, providing a buffer against significant fluctuations.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
Trading Nasdaq Futures: Correlation Insights & Market StrategiesIntroduction
The realm of futures trading offers a spectrum of opportunities, and at the forefront of this dynamic market are the E-mini Nasdaq Futures. Designed to track the Nasdaq 100 index, these futures contracts have become a favorite among traders who focus on technology and growth-oriented companies. The Nasdaq 100, dominated by technology giants, serves as a barometer for the broader tech sector and offers insights into the health of the US economy.
Basic Product Specifications
Point Value: Each point of the E-mini Nasdaq Futures is worth $20.00, making them an accessible yet potent instrument for both individual and institutional traders.
Trading Hours: Reflecting the global nature of the financial markets, these futures trade nearly 24 hours a day, from Sunday evening to Friday afternoon (US times), ensuring that traders across time zones can participate in market movements.
Current Margin Requirements: As of the latest update, the initial margin requirement for one E-mini Nasdaq Futures contract is approximately $9,000, subject to change based on market volatility. The maintenance margin is slightly lower, ensuring traders have some leeway in managing their positions.
Micro E-mini contracts available: 10x smaller than the E-minis.
Market Context and Economic Events
In the ever-evolving landscape of global finance, several macroeconomic events cast a significant impact on the futures market. For traders of E-mini Nasdaq Futures, staying abreast of these events is crucial. Key among them is the Federal Open Market Committee (FOMC) meeting, a regular event that can sway market sentiments and cause significant price movements. The announcements regarding interest rates and economic outlook made during these meetings are pivotal in shaping market trends.
Similarly, the release of labor market reports, including unemployment rates and job creation numbers, provides critical insights into the economic health of the country. These reports can trigger volatility in the E-mini Nasdaq Futures, presenting both risks and opportunities for traders. Understanding and anticipating the potential market reactions to these events is an integral part of a successful trading strategy.
Correlation Analysis and Trading Opportunities
A cornerstone of strategic futures trading lies in understanding the relationships between different financial instruments. Our recent analysis highlights the intriguing correlation dynamics of E-mini Nasdaq Futures with other key markets. While E-mini Nasdaq Futures often move in tandem with major indices like the Mini Dow Jones and E-mini S&P 500, they occasionally exhibit negative correlations with markets such as Gold, Euro Futures, Bitcoin, and Light Crude Oil.
Insights from Correlation Analysis:
Gold: Traditionally viewed as a safe haven, Gold often moves inversely to risk assets like Nasdaq Futures. In periods of market uncertainty or economic downturns, investors might flock to Gold, driving its prices up, while tech-heavy indices like Nasdaq could see a decline.
Euro and Bitcoin Futures: The relationship between Euro/Bitcoin Futures and Nasdaq Futures is nuanced, often influenced by broader economic policies and shifts in global trade dynamics and or monetary policy affecting the US Dollar.
Light Crude Oil: Fluctuations in oil prices can have a multifaceted impact on stock markets, including the Nasdaq. Rising oil prices, signaling higher energy costs, can negatively affect the performance of tech companies, leading to an inverse relationship.
Strategic Trading Approaches : Identifying bearish setups in Gold, Euro Futures, Bitcoin, and Light Crude Oil can be a precursor to bullish opportunities in E-mini Nasdaq Futures. For instance, a downturn in Gold amid rising economic optimism can signal an opportune moment to go long on Nasdaq Futures. Similarly, bearish trends in Euro/Bitcoin Futures and Light Crude Oil, perhaps due to geopolitical tensions or shifts in global demand, can also point towards potential gains in the Nasdaq market.
The below chart, where various correlations have been computed by aggregating daily data since 2018, shows a negative correlation between Euro Futures and Nasdaq Futures. Such inverse correlation will be used in the following section as a key element to plan on a long Nasdaq Futures trade.
Technical Analysis: Decoding Market Trends
Technical analysis forms the backbone of trading strategy formulation, especially in the volatile world of futures trading. For E-mini Nasdaq Futures, two key technical indicators – the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) – provide valuable insights into market momentum and potential trend reversals.
Moving Average Convergence Divergence (MACD):
The MACD is a trend-following momentum indicator that shows the relationship between two moving averages of a security's price. It consists of the MACD line (the difference between the 12-day and 26-day exponential moving averages), the signal line (a 9-day EMA of the MACD line), and the histogram (which illustrates the distance between the MACD line and the signal line).
Having both MACD lines above the zero line can be seen as bullish as it could be interpreted as an up-trending market and could indicate a potential upward price momentum, signaling traders to consider a long position. Conversely, having both MACD lines below the zero line might suggest a selling or shorting opportunity.
Relative Strength Index (RSI):
RSI is a momentum oscillator that measures the speed and change of price movements, oscillating between zero and 100. Typically, an RSI above 70 indicates a security is overbought, while an RSI below 30 suggests it is oversold.
For traders of E-mini Nasdaq Futures, an RSI reading near 70 could warn of a potential market pullback, suggesting a cautious approach or a potential short position. An RSI near 30, however, might indicate an upcoming price rise, presenting a buying opportunity.
Practical Application : Incorporating these indicators into the analysis of E-mini Nasdaq Futures allows traders to make more informed decisions. By monitoring the MACD lines and RSI levels, traders can gauge the market's pulse, identifying key entry and exit points that align with their risk-reward parameters.
Trade Rationale :
The Nasdaq Futures daily timeframe presents us with an up-trend (based on MACD), but caution may be advisable for long traders since RSI values are near 70. Given the fact that UFOs (UnFilled Orders) are available below price, patient traders may be interested in waiting for a retracement into such lower prices before planning on a buy opportunity.
Such trade may receive “extra” help from the negatively correlated Euro Futures contract which recently switched from an up-trend to a down-trending environment as seen above.
Trade Plan: Strategic Execution
Developing a well-thought-out trade plan is essential for capitalizing on the opportunities presented by E-mini Nasdaq Futures. Given the insights from our correlation and technical analysis, here’s a strategic approach for trading:
1. Identifying Entry Points:
Utilizing bearish setups in negatively correlated markets (Euro Futures) as indicators for potential bullish momentum in E-mini Nasdaq Futures.
While both MACD lines remain above the zero line and RSI readings remain below 70, look for potential bullish price reactions between 17076.50 and 16316.00, which is where our technical analysis suggests Buy UnFilled Orders (UFOs) may be available.
2. Setting Target Prices:
Determining realistic target prices based on historical price movements and resistance levels observed in the Nasdaq Futures market.
Since the Nasdaq Futures is in a position to potentially start making new all-times high prices, a target could be set using a Fibonacci projection pointing at 18527.00.
3. Establishing Stop-Loss Levels:
Placing stop-loss orders to minimize potential losses. These should be set at levels where the initial trade hypothesis is invalidated, such as below 16316.00, which is where UnFilled Orders would be proven to not to be available.
4. Calculating Reward-to-Risk Ratio:
Ensuring that the potential reward justifies the risk taken. A healthy reward-to-risk ratio, such as 2:1 or higher, is typically desirable.
5. Point Values and Contract Specifications:
For E-mini Nasdaq Futures, understanding that each point movement represents a $20 change per contract. This knowledge is crucial in calculating potential profits and losses.
Considering Micro contract options for traders with smaller account sizes or those seeking to manage risk more conservatively. The point value would be $2 in such case.
Practical Considerations : In implementing this trade plan, continuous market monitoring and readiness to adjust strategies in response to changing market conditions are paramount. The plan aims to maximize profits while strictly managing risks, aligning with individual trading styles and risk tolerances.
Risk Management: Safeguarding Investments
Effective risk management is the cornerstone of successful trading, particularly in the dynamic environment of E-mini Nasdaq Futures. Implementing robust risk management strategies not only protects investments but also enhances trading performance.
1. Utilizing Stop-Loss Orders:
Stop-loss orders are essential in limiting potential losses. They should be set at levels where the initial trade hypothesis is invalidated.
These orders help in managing trades without emotional biases, ensuring decisions are based on pre-set risk parameters.
2. Hedging Techniques:
Hedging strategies, such as using options or diversifying with inversely correlated assets, can provide a safety net against adverse market movements.
For instance, while correlations are not a guarantee, holding positions in Gold or WTI Crude Oil Futures could serve as a hedge against a downturn in the E-mini Nasdaq Futures.
3. Avoiding Undefined Risk Exposure:
It is crucial to avoid situations where the potential loss is unknown or unlimited. This can be achieved by using defined-risk strategies and avoiding high-leverage positions that can amplify losses.
Traders should be aware of the leverage inherent in futures contracts and adjust their position sizes accordingly.
4. Adapting to Market Conditions:
A flexible approach to risk management is key. This involves regularly reviewing and adjusting stop-loss levels and hedging positions in response to changing market dynamics.
Staying informed about economic events and market trends is vital in making timely adjustments to risk management strategies, including a potential for a trade to be invalidated and cancelled altogether.
Conclusion
In the intricate tapestry of financial markets, trading E-mini Nasdaq Futures presents both challenges and opportunities. This article has navigated through the complex correlations between Nasdaq Futures and other key financial instruments, uncovering strategies to capitalize on these relationships. The integration of technical analysis, focusing on MACD and RSI indicators, further enriches the trader's arsenal, providing a deeper understanding of market trends and potential entry and exit points.
As we've explored, the negative correlations with markets such as Gold Futures, Euro Futures, or WTI Crude Oil, can signal opportune moments to go long on Nasdaq Futures. Conversely, these markets can offer hedging opportunities against potential downturns in Nasdaq. The strategic execution of trades, underpinned by solid risk management practices, forms the bedrock of successful trading in this dynamic environment.
In conclusion, trading E-mini Nasdaq Futures demands a multifaceted approach, blending correlation insights, technical analysis, and stringent risk management. By staying informed, adaptable, and disciplined, traders can navigate the ebb and flow of the Nasdaq Futures market with increased confidence and potential for success.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
NASDAQ Final pull back pending unless the 1day MA50 breaks.Nasdaq / US100 hit the top of the long term Channel Up and Resistance A (March 2022 top) and got rejected.
Based on the previous Higher Highs, the rejection should form a Channel Down / Bear Flag.
According to that, there is one final pull back pending to 14730. Buy it and target 15500.
If anyhow the price crosses under the 1day MA50 or closes the 1day candle under the 0.786 Fibonacci level, sell and aim at the 1day MA100 that is unchallenged since March 13th.
There return to buying, which is also the bottom of the long term Channel Up, and target 15500.
The RSI's Rising Support can be used as a great additional indication of a buy (hold) or sell (break) inside this long term Channel Up.
Previous chart:
Follow us, like the idea and leave a comment below!!
NASDAQ: Correction aiming at the 4H MA200.Nasdaq reached the R1 (15,300) last week, a highly important benchmark as it is the March 2022 Top. Being overbought on the 1D timeframe (RSI = 71.117, MACD = 398.240, ADX = 42.100), the current correction comes as a natural consequence. The target is the bottom of the three month Channel Up. Ideally we aim at the 4H MA200 (TP = 14,600), which has been previously tested and held as Support on May 4th and April 25th.
Prior idea:
## If you like our free content follow our profile to get more daily ideas. ##
## Comments and likes are greatly appreciated. ##
NASDAQ to infinity and beyondYou are looking at the 1h chart of the NDQ.
Based on my EWC it looks like this pullback is just another bullish retracement which could find support.
We started pulling back after reaching 1.618 (iii) vs. (i) which is the most common fibonacci target for third waves.
Questions are ALWAYS welcome, trade safe!
NASDAQ Futures NQM: Bullish Rally Encounters Potential ReversalToday's market action on NASDAQ Futures (NQM) provided quite a spectacle, as we witnessed an impressive pump that led to a new Higher High at 13683. With limited levels of resistance left in the upper echelons at 13817 and 13995, it appears we're running out of targets on the upside. Additionally, the VIX index is down, pointing to a relatively calm market environment.
However, it's crucial to note the emergence of several potential reversal signals. While the market has been propelling upwards, the MACD recently crossed below the signal line, displaying a bearish divergence as it forms a downtrend. This bearish divergence could potentially be signaling a weakening of the bullish momentum.
Moreover, the STOCHRSI reached a high of 97 before starting to turn around earlier today (5/18/23) at 7:30 and continuing downwards at the market open. This, too, could be signaling a possible cooling down of the overheated bullish trend.
In the scenario of a downturn, the key support levels to watch are 13610, 14554, 13505, and 13475.
Given these observations, today's trading strategy should be approached with caution. Although the bullish trend remains dominant, the emerging bearish signals suggest potential for a reversal. Therefore, vigilant monitoring of these critical technical indicators and support levels will be crucial.
In conclusion, although the NASDAQ Futures NQM continues to push higher, we are now observing significant signs of potential bearish divergence. This calls for heightened attention and careful navigation of trading strategies. As always, keep a close watch on market trends and adjust your strategy as necessary.
This analysis was also posted to my Blog!
-The Latin Trader
Nasdaq 100 - Progressing into the 2nd stage of the bear marketOur last post on the Nasdaq index outlined our bearish stance on the general stock market. Today will be no different, and we will reiterate our grim opinions and provide more thoughts on the latest developments in the market.
Since our last article, the Nasdaq index continued to drift lower; meanwhile, QQQ reached our price target of 280 USD and halted its decline slightly above the 270 USD price tag. Furthermore, since November 2021, the Nasdaq index has lost more than 33%, plunging deep into the bear market territory.
Unfortunately, we do not see any reversal of the primary trend on the horizon. Contrarily, we think the FED will follow its path of demand destruction, negatively affecting the stock market and the real economy. Indeed, we would argue that the bear market is already transitioning from the 1st stage into the 2nd stage.
The 2nd stage of the bear market is characterized by the decline of corporate profits and economic projections, which is currently under progress. Therefore, we voice a strong word of caution to market participants over the medium and long term. We believe the market will continue to weaken and constitute new lows over time.
Regarding the short-term, major stock market indices are currently hovering near their 2022 lows. Therefore, we are looking for signs of a short-lived bounce. We reason that soon, we will start seeing market participants forecasting double bottom formations, which will once again lure weak hands into the market - ones that will later reinforce the selling pressure.
Despite that, we commit to our bearish stance over the medium and long term. Accordingly, we maintain 11 000 USD price target for NQ1!; as for the QQQ, we currently choose not to set any price target.
Illustration 1.01
Illustration 1.01 shows the daily chart of NQ1!. Yellow arrows indicate recent technical developments. Additionally, two simple moving averages reflect the presence of a downtrend.
Technical analysis - daily time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the daily time frame is bearish.
Illustration 1.02
The image above displays support and resistance levels for NQ1!.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame is bearish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Nasdaq 100 - Price target for QQQ at 290 USD, 280 USDOn 11th August 2022, we stated the market was at its peak and due to reverse. Since then, the market has fallen more than 10% and reached our price target for QQQ. Furthermore, since fundamental and technical factors have not changed, we have no reason to change our bearish view. Accordingly, we maintain the price target for NQ1! at 11 000 USD. Additionally, we would like to set new price targets for QQQ at 290 USD and 280 USD. We sound a strong warning of impending acceleration in the selloff.
Illustration 1.01
Illustration 1.01 shows the daily chart of QQQ, which is down more than 10% from its peak on 16th August 2022.
Technical analysis - daily time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the daily time frame is bearish.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame is bearish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
its not crashing, but its not popping either (us100)if were staying over 14700 and breaking 14875 id imagine its safe to stay long the index aiming for 15200. if we break thursdays low id imagine its safe to buy puts aiming for 14040. i dont think theres much rocking the price either direction, even with traders up in arms about this or that this week. most news is already priced in, and i wouldnt worry about crises be it ukraine or rate hikes. qqe is still long so ive still got a long bias until bears prove otherwise.
Technical analysis update: Nasdaq 100 (27th January 2022)Yesterday after the FOMC press conference Nasdaq 100 (and other major indexes) surrendered most of its earlier gains. We continue to maintain a bearish stance on the general stock market as we think NQ1! is headed lower. Our view is supported by bearish fundamental and technical factors. Additionally, the current high volatility pushes odds in favor of more downside for the markets. We currently watch the upward moving channel on the hourly time frame. This formation presents an interesting trade setup with two alternatives. First alternative would involve placing a short trade entry below the lower bound of the upward moving channel. Stop-loss would be placed above the lower bound in order to limit loss potential. Second alternative would involve taking a long trade entry above the upper bound of the upward moving channel and placing stop-loss below it.
Illustration 1.01
Illustration above shows the daily chart of NQ1!. It also shows steepening of fan lines.
Technical analysis - daily time frame
RSI remains in the oversold territory. MACD and Stochastic are bearish. DM+ and DM- are bearish too. ADX continues to grow which suggests that the bearish trend continues to strengthen. Overall, the daily time frame is bearish.
Technical analysis - weekly time frame
RSI, MACD and Stochastic are bearish. Same applies to DM+ and DM-. ADX increases which suggests that the bearish trend strengthens. Overall, the weekly time frame is bearish.
Support and resistance
Please feel free to express your own ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Your own due diligence is highly advised before entering trade.
