This is the level we have been watching for so long on the daily chart for the NQ emini, and one which has finally been breached, and as a result opened the way for this index to climb higher and develop a sustained bullish trend. And the level I am referring to is at 7960, and denoted with the heavy red dashed line of the accumulation and distribution indicator for NinjaTrader which not only describes these areas, but also paints them in increasing thickness, the more a level is tested and holds firm. This was an area which had been tested repeatedly in the past and therefore presented very solid technical resistance to any advance. However, as a result of Friday’s pivotal price action, the week ended with a close above this level on good volume allowing the index to break out from its longer term congestion.
Monday’s price action confirmed this bullish sentiment with a second up candle on good volume, and with a solid platform of support now in place we can expect to see a resumption of the longer term bullish trend develop for equity markets in the US. Note also the trend monitor indicator which supports and confirms the bullish sentiment in this timeframe, and with a low volume node ahead on the volume point of control indicator, the outlook is positive as risk on sentiment continues to prevail.
From a fundamental perspective, market participants are now awaiting tomorrow’s FOMC and whether the FED will indeed lower interest rates once again thereby giving markets a further injection of bullish intent.