26/8/13 NQ Analysis

(1) US equity market – BULLISH
Mkt is slightly uptrend, still going up within the mild uptrend channel.

Immediate target is 1700. Price may retrace to 1650 at channel support, before going up again to 1700.

Fundamentally, S&P500 is correlated with Bonds (2yr, 5yr treasury notes, and 30yr Bond), Gold, and VIX.

Bonds go up –> S&P500 goes up (Bond and equity market is now positively correlated 0.50+)
VIX goes down –>S&P500 goes up (-0.8)
Gold goes down –> S&P500 goes up (-0.6)
Gold down –> DOllar Index up –> S&P500 Up
Dollar Index Up –> EURUSD down –> S&P500 up

Thus we want to see Gold down, VIX down, Bond up, to be consistent view that Equity mkt is going up. If EURUSD pairs does down and Dollar index up, it will help to confirm S&P500 will go up. Dollar now has positive correlation with S&P500. Relationship changes all the time, and its important to keep track on daily basis.

Daily Dow Jones Transportation Average ($DJT)
Above 100 MA. Clearly uptrend.


Daily chart ($SPX)
S&P500 Daily chart is moderately bullish.



Daily chart shows a strong uptrend channel. However, we are at the peak of the channel. Nonetheless, the long signal appears again for the 4th time only this year, signalling a continuation of uptrend. We may look to long NQ.


60min chart
Supports daily chart’s view of bullish NQ. We may look to long NQ. Its a bit far away from Ichi Moku support. We wait for retracement towards SD-3 area to long.


15min chart
LINE 6 is 3090, a good retracement area to long.



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s