US 100

NASDAQ 100 Short continuation or Start of next Bull Leg?

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1. Top-Down Bias
• Weekly (Long-Term)
• Bias: Still in a primary uptrend (higher highs & higher lows, trading above key SMAs and the Ichimoku Cloud).
• Current Pressure: Latest weekly candle shows a sharp pullback; momentum indicators (MACD, RSI) are rolling over from positive territory.
• Daily (Intermediate)
• Bias: Turned short-term bearish (clearly below daily Ichimoku Cloud, 10/50/100-day SMAs; lower highs & lower lows formed).
• Key Pivot: 200-day SMA (~20,272). A sustained break below strengthens the intermediate downtrend; a defense of this level may spark a bounce.
• 4H & 2H (Short-Term & Intraday)
• Bias: Both are firmly bearish with a sequence of lower highs and lower lows, supported by high ADX and negative momentum readings.
• Oversold Conditions: RSI and Stochastics are near oversold on lower timeframes, hinting at possible short-term bounces within a broader downtrend.

Net Takeaway:
• Long-term (Weekly) remains bullish.
• Intermediate to short-term (Daily/4H/2H) is currently bearish.
• Expect potential downward continuation unless the market reclaims key daily/4H resistance levels (around 21,000–21,200).

2. Key Levels & Confluences
1. Support Zones
• Weekly/Daily Major Support:
• 20,300–19,800 region: Aligns with the 200-day SMA (~20,272), 50% Fibonacci (~19,800), and previous bullish order blocks.
• 19,500–19,200 area: Next layer of institutional demand if the 20k handle fails.
• Deeper Weekly Support: 17,600–16,000 (if the sell-off becomes more pronounced).
2. Resistance Zones
• Daily/4H Supply & Bearish Order Blocks:
• 21,000–21,200: Confluence of broken support-turned-resistance, daily Ichimoku Cloud lower boundary, multiple SMAs overhead.
• 22,000–22,200: Higher-timeframe supply zone where previous rallies failed.
3. Fibonacci Confluence
• From the Weekly Swing (~17,378 low to ~22,206 high):
• 38.2% (~20,362) near current price.
• 50% (~19,796) is a critical deeper support.
• Daily Extensions: If below 20,272, watch potential extension toward 1.618 (~19,475).
4. Trend Lines / Channels
• Ascending Weekly Channel: Still intact overall, but price is testing lower bounds.
• Broken Daily/4H Channel: Price has slipped beneath shorter-term ascending channels, reinforcing the current correction.

3. Scenario 1 (Bullish Continuation / Bounce)

Despite the short-term downtrend, there is a chance that the weekly uptrend reasserts itself if price stabilizes above major support (particularly near the 200-day SMA or 19,800–20,300). Here’s how different risk appetites might approach a bullish scenario:

3.1 Narrative
• Why Bullish? The weekly structure remains intact, and momentum oscillators (RSI, Stochastics) on lower timeframes are oversold. If price holds the 200-day SMA (~20,272) or the broader 19,800–20,300 demand zone, a relief rally could ensue—potentially aligning back with the higher-timeframe uptrend.

3.2 Aggressive / High-Risk Bullish Approach
1. Where/When to Enter
• Look for early signals on 2H/4H near 20,300–20,500 (if tested and shows a bullish engulfing or strong volume spike).
• Could also enter on a quick intraday bounce off 20,200–20,300 (if price wicks into that zone).
2. Stop-Loss Placement
• Tight stop just below the most recent intraday swing low (e.g., below 20,200 or 20,100), giving minimal room for volatility.
3. Confirmation Level
• Minimal confirmation: Possibly only a bullish candlestick pattern or a short-term RSI cross back above 30–35 (showing a slight momentum shift).
4. Pros & Cons
• Pros: Best potential reward if you catch the exact turning point.
• Cons: Higher chance of false break or whipsaw if price continues downward.
5. Target Levels & Profit Objectives
• T1: ~20,900–21,000 (overhead Fib confluence + broken support).
• T2: ~21,600–21,700 (daily middle Bollinger Band / cluster of SMAs).
• Partial take-profit at T1; consider moving stop to break-even and aiming for T2 if momentum continues.
6. Invalidation
• A decisive 4H close below 20,000 or the 200-day SMA being lost on a daily close with no immediate rebound.

3.3 Moderate-Risk Bullish Approach
1. Entry Conditions
• Wait for a 4H candle close above a minor resistance or pivot (e.g., reclaiming 20,700–20,800).
• Look for a bullish MACD cross or RSI returning above 40–45 on the 4H.
2. Stop-Loss Placement
• Slightly below the newly formed higher low (once price confirms an upward pivot)—for instance, below ~20,400 if that level becomes an intraday support again.
3. Pros & Cons
• Pros: Reduces the likelihood of entering on a dead-cat bounce.
• Cons: Potentially misses the lowest entry if price rebounds sharply from 20,300.
4. Target Levels & Profit Objectives
• T1: ~21,000–21,200 (near daily Ichimoku bottom/cloud edge).
• T2: ~21,700–22,000 (upper daily Bollinger / major daily supply).
• Scale out at T1 or tighten stop-loss; let the rest run if momentum persists.
5. Invalidation
• A return below the 4H pivot or a break under ~20,300 after you’ve entered.

3.4 Conservative / Low-Risk Bullish Approach
1. Entry Conditions
• Require a Daily close back above key resistance or the Ichimoku Cloud bottom (~21,200).
• Multiple indicators aligned bullishly: RSI > 50 on 4H/Daily, MACD crossing positive, etc.
2. Stop-Loss Placement
• Below the reclaimed pivot on the daily timeframe—e.g., below ~20,700–20,800 region—or beneath the 200-day SMA if you want an even wider stop.
3. Pros & Cons
• Pros: Higher probability that the correction has ended. Fewer false signals.
• Cons: Entering significantly higher reduces your initial risk/reward ratio.
4. Target Levels & Profit Objectives
• T1: ~21,700–22,000.
• T2: Retest of the most recent swing high around 22,200–22,400.
• Could move stop to break-even after T1.
5. Invalidation
• A Daily close back below ~20,700 or failing to hold the 200-day SMA on subsequent retests.

4. Scenario 2 (Bearish Reversal / Deeper Correction)

Should the short-term downtrend continue, or if weekly support fails near 20k, the path of least resistance is lower. Below are approaches for different risk appetites.

4.1 Narrative
• Why Bearish? Daily/4H/2H structure is decidedly bearish. If the 200-day SMA (~20,272) and nearby support (20,000–20,300) give way or fail to spark a sustained bounce, price could accelerate downward toward 19,800–19,500 or even lower.

4.2 Aggressive / High-Risk Bearish Approach
1. Entry Conditions
• Short on minor bounces/retests of intraday resistance (e.g., 20,700–20,800) with minimal confirmation.
• Possibly enter when 2H/4H candles show a quick rejection of the descending trend line or when RSI ticks back up to ~40 but fails to break higher.
2. Stop-Loss Placement
• Tight stop just above the local swing high (e.g., above 20,900 or a short-term pivot).
3. Pros & Cons
• Pros: Potentially large reward if price continues to drop swiftly.
• Cons: Higher false-break risk if a sudden short-covering rally occurs.
4. Target Levels & Profit Objectives
• T1: ~20,000–19,800 (major daily support, near 200-day SMA or Fib zone).
• T2: ~19,500 or even 19,200 if momentum accelerates.
• Consider partial profit at T1; let the remainder ride if the breakdown continues.
5. Invalidation
• A sustained 4H close above 20,900–21,000 indicates short-term momentum shifting against you.

4.3 Moderate-Risk Bearish Approach
1. Entry Conditions
• Wait for a 4H candle close below 20,400 or 20,300, confirming a new leg down.
• Check that RSI remains < 50, MACD is negative, and no immediate bullish divergence.
2. Stop-Loss Placement
• Above the retest zone near the breakdown point (~20,400–20,500), giving some room for volatility spikes.
3. Pros & Cons
• Pros: Avoids jumping in on whipsaws; the downtrend is confirmed by a fresh breakdown.
• Cons: May miss a portion of the initial move if price collapses quickly through 20,300.
4. Target Levels & Profit Objectives
• T1: 19,800–19,500 range.
• T2: 19,200 or lower, depending on volume flow and broader daily momentum.
• Move stops to break-even after T1 if momentum continues.
5. Invalidation
• A 4H close back above the breakdown level (~20,400–20,500) or a bullish crossover in MACD that breaks the downward structure.

4.4 Conservative / Low-Risk Bearish Approach
1. Entry Conditions
• Wait for a Daily close below the 200-day SMA (~20,272) and/or sub-20k, plus a retest of that broken support that fails.
• Indicators (RSI < 50, MACD negative) across Daily and 4H confirm sustained bearish control.
2. Stop-Loss Placement
• Above the well-defined structural daily high (e.g., near 20,700–20,800) or above any retest zone.
3. Pros & Cons
• Pros: High probability the trend is continuing downward without a sudden reversal.
• Cons: You may enter significantly lower, reducing R:R if the biggest chunk of the move has already happened.
4. Target Levels & Profit Objectives
• T1: ~19,500–19,200.
• T2: If the weekly structure fully shifts, possibly mid- to upper-18k or even 17k in extreme scenarios.
• Consider partial TP at T1, trailing the remainder for further downside.
5. Invalidation
• A Daily close back above 20,400–20,500 or the 200-day SMA, negating the breakdown.

5. Risk Management & Position Sizing Guidelines
1. Volatility Awareness (ATR)
• 4H ATR (~180) and Daily ATR (~379) indicate elevated volatility. If you choose tighter stops, consider reducing position size accordingly.
• Alternatively, widen stops to accommodate swings, but reduce overall leverage to keep risk consistent (e.g., risk 1–2% of account).
2. Reward-to-Risk Ratios
• Aim for at least 1:2 or better.
• If uncertain about the next directional move, trade smaller or wait for confirmation.
3. Timeframe Alignment
• When the Weekly and Daily align (bullish or bearish), you can consider a larger position size.
• Currently, Weekly is bullish while Daily is bearish, so either trade smaller or adopt intraday strategies until clarity emerges.
4. Partial Profit Strategies
• Scale out at T1 (first target) and trail your stop to break-even or near the entry.
• Let the remainder run to T2 if momentum continues in your favor.

6. Extra Notes / Contradictions
• Weekly vs. Intraday Mismatch:
• The long-term chart is still bullish, yet daily/intraday charts are in a firm downtrend. Some traders may opt to only short intraday rallies until price reclaims key daily levels that align with the weekly uptrend.
• News & Macro Catalysts:
• Any significant economic releases or global risk events could abruptly shift technical setups. Be mindful of volatility spikes.
• Ranging vs. Trending:
• If the market churns sideways near 20,300–20,700, you might see multiple false breaks. Use higher-timeframe closes for clarity or reduce trade size if in doubt.

7. Final Summary
1. Top-Down Bias
• Weekly: Bullish overall but momentum is fading.
• Daily & Below: Bearish structure, with oversold indicators that might spark a short-term bounce.
2. Key Levels & Confluences
• Support: 20,300–20,000 (incl. 200-day SMA), then 19,800–19,500.
• Resistance: 20,700–21,000 for intraday bounces; 21,200–22,000 from daily order blocks.
3. Scenario 1 (Bullish):
• Aggressive: Enter near 20,300–20,400 with minimal confirmation. Tight stops just below 20,200.
• Moderate: Wait for a 4H close above 20,700–20,800. Stop below the higher low.
• Conservative: A daily close above ~21,200 plus aligned indicators. Stop below the reclaimed pivot.
4. Scenario 2 (Bearish):
• Aggressive: Short near 20,700–20,800 intraday bounces. Tight stop above swing high.
• Moderate: Wait for a 4H close below 20,300–20,400. Stop above the retest zone.
• Conservative: A daily close below the 200-day SMA and a failed retest. Stop above a daily pivot.
5. Risk Management:
• Control position size based on ATR; keep R:R ≥ 1:2; consider scaling out at T1 and protecting capital.
6. Extra Notes / Contradictions:
• A short-term bounce can occur at any time due to oversold indicators. Weekly remains structurally bullish, so watch for strong buying interest near 20k or 19.8k.

Bottom line: The market is in a higher-timeframe uptrend but an active short-term correction. Traders can play a potential bounce off key support (Bullish Scenario) or join the short-term downtrend on rallies/fresh breakdowns (Bearish Scenario). As always, maintain disciplined stop-losses, manage position size relative to volatility, and let the market confirm your directional bias before committing significant capital.

Disclaimer: This framework focuses on potential probabilities and technical triggers. No outcome is guaranteed; always adjust trade size and stops according to personal risk tolerance.

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