Nasdaq -this rally is fragile
The week started with an amazing recovery rally as euphoria took markets after Trump-Xi meeting. But markets are never certain and they are always cautious. Now, looks like this morning investors in Asia woke up, scratched their heads and asked themselves if indeed US and China resolved their dispute or not. And it really seems that they are in doubts – Japanese and Chinese stocks plunged today.
Next thing is what will be Powell’s revelations this week. Markets already worried witnessing the US yield curve becoming inverted for the first time since 10 years. In the past it was always a sign of imminent recession and questions whether “this time different” ?
What we see on Daily chart is selling pressure and very bearish candle as a result of yesterday’s price action. Price failed to follow through important resistance levels yesterday
On 1-hour chart we see a bullish trend but price is really stretched. There are local resistance levels 7030 and 7060 on the upside and price will likely to test them but I would be cautious to go long for now. If today bullish run fails again, then price will most likely to reverse and break below 6970 support line.
In this case another fall is likely. Next support levels below are 6900, 6850 and 6740 – enter longs at those levels, scaling into position and think about taking profits fast – bullish run is very unstable.
The fact that asian markets fell today does not add optimism. I would only take tactical intraday trades on bounces from supports and resistances.
Have a nice day !