NQ-Using 2018 Ichimoku Momentum Patterns for Clues
I've read a lot of articles recently comparing the 2018 Fed QT cycle to what is happening currently so I thought it would be interesting to compare market patterns.
I am mostly interested in NQ because it is creating what appears to be a very clear expanding triangle on the weekly and if this is the case it could explode into one crazy squeeze to bring NQ to almost 20K by April/May 2022. I know, I know this sounds crazy but expanding triangles always end at 5 and based upon where I see the end of 4 we could see some crazy relentless squeeze.
Using Ichimoku, I went back to 2018 and found were momentum (my purple line) closed below price on the weekly (Before Oct 22, 2018 momentum had not been below price since Jan 4, 2016 so this is a big deal). In 2018, once the weekly closed below price there was movement to the upside, just like we are currently seeing, however price to the upside was limited to where momentum (purple line) touched the actual weekly candle top. In this case, price on NQ would be limited to 15,157.25 (roughly) before moving back down to a price that is lower than what we saw in January. The monthly futures for NQ also just opened Feb 1st below the monthly Tenkan San line which is a bearish sign IMO. The Feb Monthly Tenkan San line is 15,114.88...this will also create another area of strong resistance going into February and is pretty darn close to 15,157.25.
Based upon 2018, max pain/capitulation for NQ due to Fed QT will come when momentum goes below the Kijun line (orange line) and we have yet to get below that line, even with last weeks low.
The .382 from the Covid low is 12,894.50. I'm not sure we hit this figure but it's in line with my expanding triangle analysis and my "momentum" analysis from 2018 Ichimoku.
Notice my teal line...this also makes symmetrical sense but I think the angle of this line will be straight up as the squeeze will be vicious once we find support.
Or maybe we have found support and are off the races...I'll believe that once we bullishly close above 15,157.25.
I am mostly interested in NQ because it is creating what appears to be a very clear expanding triangle on the weekly and if this is the case it could explode into one crazy squeeze to bring NQ to almost 20K by April/May 2022. I know, I know this sounds crazy but expanding triangles always end at 5 and based upon where I see the end of 4 we could see some crazy relentless squeeze.
Using Ichimoku, I went back to 2018 and found were momentum (my purple line) closed below price on the weekly (Before Oct 22, 2018 momentum had not been below price since Jan 4, 2016 so this is a big deal). In 2018, once the weekly closed below price there was movement to the upside, just like we are currently seeing, however price to the upside was limited to where momentum (purple line) touched the actual weekly candle top. In this case, price on NQ would be limited to 15,157.25 (roughly) before moving back down to a price that is lower than what we saw in January. The monthly futures for NQ also just opened Feb 1st below the monthly Tenkan San line which is a bearish sign IMO. The Feb Monthly Tenkan San line is 15,114.88...this will also create another area of strong resistance going into February and is pretty darn close to 15,157.25.
Based upon 2018, max pain/capitulation for NQ due to Fed QT will come when momentum goes below the Kijun line (orange line) and we have yet to get below that line, even with last weeks low.
The .382 from the Covid low is 12,894.50. I'm not sure we hit this figure but it's in line with my expanding triangle analysis and my "momentum" analysis from 2018 Ichimoku.
Notice my teal line...this also makes symmetrical sense but I think the angle of this line will be straight up as the squeeze will be vicious once we find support.
Or maybe we have found support and are off the races...I'll believe that once we bullishly close above 15,157.25.
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Here is the daily now vs. Oct-Dec 2018. Looks like we are more in line with the beg of Nov rise. Yellow line is 377 SMA, Red is 244 SMA, Grey is 150EMA (all on the daily)
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Well...we did not bullishly close above 15,157.25 since writing this post. I'm still short term Bearish on NQ. The death cross looks inevitable at this point unless the macro landscape changes.