Nasdaq futures and QQQ (weekly QQQ is below) covered their closes from 2/21 on Wednesday and closed beneath those levels today. Mistrust of strength has been misguided but the gap fill and down day today at least presents a bearish risk point (Wednesday’s high).
Today may have been a lower high against the 4/17 high. Action since 4/13 has a head and shoulders look to it as well. In short there is no change to looking towards 2616/30 (bottom of the zone is VWAP from the low) in the near term. The chart below shows the current Dow chart with the Dow in 1929. The comparison is anchored with the panic lows. The rallies are similar. If this continues, then price would test the April lows (about 13% lower) before resuming higher. That would be considered the re-test but rest assured that if we did test the April low then most would expect a test of the March low and miss the buying opportunity. The April low in ES is 2424.75 and the 61.8% retrace of the rally from the March low is 2445.50. I think that’s the zone to focus on now.
Today’s ES break confirms the rally from the March low as a wedge. The implication is that the March low will eventually be re-tested. Near term, I’d still watch for a bounce from 2600/30. Proposed resistance is now the underside of the broken wedge line at 2808.
Remember the 4 hour volume reversal on 4/9? ES failed to follow through on that reversal but price is back to that level. 2923/48 wasn’t reached but the rally from the March low consist of 2 equal waves…exactly. So, there is reason to ‘think’ that a countertrend rally is complete. Pay attention to 2770, which is the trendline from the low and VWAP from the February high. A break below there would also leave the rally from March as a bearish wedge, which would suggest an eventual re-test of the low. The next immediate spot to watch then would be 2600/30 (VWAP from the low and recent resistance and support).