Nasdaq Intraday Review - Thursday 14 Nov 2024I trade Nasdaq exclusively
Trading in GMT time zone
Sharing my post day review and analysis in case it can help you!
Did my analysis at +- 5:30 am GMT (00:30 am EST)
Economic news - PPI and Initial jobless claims
News - None
Directional bias - Not sure, morning analysis should guide
Morning analysis:
M TF - Still very bullish, this months candle is up 10'700 pips but still 15 days till candle close. This shows that on the highest level, Nas is very bullish.
W TF - At time of writing this morning, candle is red. The red body is about 1500 pips. This indicates short term bearish bias. Look at last week's candle close, which closed at an all time high after breaking a very strong W resistance, it is reasonable to expect price to retrace.
D TF - Price action is showing that price is stalling. There are very long wick candles for 4 days, which represent the struggle between bulls and bears. As candle bodies are red, we see that bears are slowing managing to push price lower and lower. The way candles look at time of writing, I view this TF to be bearish.
4H TF - Shows a choppy market. There are no clear higher highs and higher lows or lower high and lower lows. Price is spiking widely in either direction, again representing the intense battle between bulls and bears. Three things are clear though, bulls have been unable to break the 0.618 SELL fib level (fib drawn from swing high at B. to swing low at A.). Bulls have been unable to break the 4H H&S neckline upwards. And lastly, up until yesterday, the 4H EMA was acting as dynamic support with bears being unable to break through downwards. But now this morning we have a clear 4H candle close below the EMA and if the 7am 4H candle closes below the EMA again, it shows that bulls were unable to push sellers back up at this level.
1H - Price is in a very bearish position. The 4H and 1H EMA are now above price and can be expected to act as dynamic resistance. The daily pivot point is also above price. Bulls will have to step in with volume and momentum to be able to break through these stacked resistance levels.
Directional bias - looks very bearish. If 4H candle closes at a lower low beneath the 4H EMA, I would consider a sell. Otherwise if a DB forms on the 1H TF and breaks the neckline and subsequently the 1H and 4H EMA, I will enter a buy.
No set bias today because TF showing bearish bias, while M TF is still bullish. It's also concerning that good CPI news was not enough to break through the sell fib levels.
I will let price action indicate what Nasdaq wants to do today.
As the day progressed:
So indeed the 7am 4H candle closed below the EMA. I did not enter a sell because I noted that the candle closed exactly at the 100 EMA of the 1H TF (marked with the thick blue line). It can be seen that this EMA has provided dynamic support to 3 candle touches before at A, C and D..
So in an effort to avoid repeating yesterday's mistake (of buying at resistance), I didn't want to sell at dynamic support. So moving down to the 5min and 15min TF after this candle closed, it was clear that price could not break this support and I did not enter a sell.
Then....
Entered a buy at the hand icon - Confirmations:
1. Market pattern - a DB formed on the 1H, with the neckline broken upwards. The break of the neckline was with a huge momentum candle breaking both the EMAs (1H EMA and 4H EMA - at time of entry the 4H EMA was in the position as marked by the purple line)
2. S&R - Pivot point broken
3. Trend - Temporary downtrend (marked in blue broken)
4. Fib - DB formed below the 0.618 fib level
Mental SL placed at half the height of the DB that I entered in on.
Unfortunately, price came back down and I close my position at my stop loss.
Decided to be out for the day.
What could I have done differently?
Losses are inevitable in trading. They will happen, whether you like it or not. The only question is....are you happy with your loss or not.
I am happy with this loss. I entered on good confirmations and I also entered with half my usual position size because my plan was to enter the other half position if price re-tested the neckline of the DB and moved up again.
So by entering small I managed my risk.
I have had this experience before where I enter on a high TF (1H) DB and price still moves down. This happened when Nas was making bigger TF retracements.
Also, at time of writing (tonight) the D candle has a long red body. If it closes with a long red body...it means we are entering a waterfall situation where price is pushing down with bigger and bigger candle bodies, gaining momentum.
Nas turning very bearish. Will need to consider my directional bias carefully tomorrow and only enter buys on 4H DB or 1H DB if the neckline has been re-tested and price then still moves up.
Hope you caught the nice sell!
Abbreviations:
TF = timeframe
TP = take profit
1H = 1 hour
4H = 4 hour
D = day
W = week
M = month
S&R = support & resistance
H&S = head & shoulders
EMA = exponential moving average
SL = stop loss
