Potential Bull Trap Brewing?

NQ1! broke out of a textbook bull flag price structure over the weekend and has consolidated nicely throughout the trading day Tuesday.

We see two price targets of interest:

• 15600 - the price structure of the most recent high and the implied move of the bull flag
  
• 15063 - the approximate point of the bull flag break and currently the location of an active "rug pull"
  

It's too early to tell whether we hit 15600 or 15063 first, but we are keeping an eye on NQ1! for any sign of reversal, with 15063 as a minimum downside target. Momentum is currently with the bulls and does not show signs of slowing down quite yet. An eventual break below the AVWAP (shown in orange) could indicate a reversal is underway.

PPI, CPI, and Fed minutes could bring larger volatility than usual this week.

Disclaimer:
Any information contained within this post does not constitute any financial, investment, or trading advice. Trade or invest at your own risk.

Comment:

Futures market continues higher towards our price target of 15600, despite lackluster PPI numbers. Bullish momentum remains strong, but the potential for a rug pull is still strong. CPI and Fed minutes on deck…

Comment:

After an initial move down below the AVWAP, NQ1 appears to have recovered and closed the day above.

With RSI < 50 and a rising wedge pattern on lower timeframes, we anticipate the AVWAP to be tested again overnight or in tomorrow's trading session. Closing decisively below would support a continued move down to 15063.

Comment:

Clean break of the AVWAP this morning. We are targeting 15063 at a minimum.

Trade closed: target reached:

Target reached; trade closed.