NQ1! - Continuous Downwards Trend Shorting Opportunity
The US economy was relatively strong last week which was surprising as there was very little other than hope of a potential trade deal with China although tangibly nothing concrete came of this whilst the government shut down continued. I suspect this was just a week of consolidation for the index rather than a reversal as all the major financial news outlets will try and have you believe.
Therefore after the government shut down continues in the news over the weekend I expect the futures market to open negatively on Sunday evening and for this to ultimately kick start the next leg of the down trend although I could be wrong as I didn't expect last week to be so good for this index. It's safest to wait for a confirmation candle which confirms that the resistance level hasn't been breached although I have already taken my short position due to the double top we saw at the end of last week and have hedging positions in place in case the US market continues to look bullish although I doubt that it will. I'm amazed it notched 5 good days in a row as the sell offs over the last few months have been pretty brutal and we tend to see a drop of roughly 2.7% for the index on a bad day and there have been many of them.
If I am correct with this then in the impending sell off it's important to keep an eye on what USD JPY and USD CHN are doing as these typically seem to tank in line with this index. It would also be a good idea to replicate this short position on the SPX500 and the US30 too although the Nasdaq seems to be the one that gives you the best % return.
If you like this analysis please give me a thumbs up and please feel free to comment as I am passionate about sharing ideas with other traders.
Happy trading everyone!
Alex
Therefore after the government shut down continues in the news over the weekend I expect the futures market to open negatively on Sunday evening and for this to ultimately kick start the next leg of the down trend although I could be wrong as I didn't expect last week to be so good for this index. It's safest to wait for a confirmation candle which confirms that the resistance level hasn't been breached although I have already taken my short position due to the double top we saw at the end of last week and have hedging positions in place in case the US market continues to look bullish although I doubt that it will. I'm amazed it notched 5 good days in a row as the sell offs over the last few months have been pretty brutal and we tend to see a drop of roughly 2.7% for the index on a bad day and there have been many of them.
If I am correct with this then in the impending sell off it's important to keep an eye on what USD JPY and USD CHN are doing as these typically seem to tank in line with this index. It would also be a good idea to replicate this short position on the SPX500 and the US30 too although the Nasdaq seems to be the one that gives you the best % return.
If you like this analysis please give me a thumbs up and please feel free to comment as I am passionate about sharing ideas with other traders.
Happy trading everyone!
Alex
Trade active:
Entered short position at 6577 on Friday. Have placed a buy order at the SL value to hedge in case this goes against initially as I expect this to play out at some point over the next few days/weeks.
Trade active:
This has been hedged as the US market is again looking strong this week based on no news and a continued govn shutdown. Will close out the hedge once there is confirmation that we are going down again.
Trade closed manually:
Might have jumped the gun on this one. Suspect we are in a consolidation period as the US economy is looking strong again which doesn't really make any sense since the news coming out of China and the US is probably even worse than it was last year.