The recent Dow Jones price action developed a number of bullish patterns that suggest that the market should continue moving higher. The following Dow Jones 4 hour charts show all of these technical patterns.

Nasdaq Composite has been the driving force behind the bull market that started on March 20, 2020. It has outperformed S&P500, Dow Jones and Russell by a big margin. However, since the start of the market correction in early September, Nasdaq has been the weakest of the four indices. In this post, I will analyze the recent NQ price action, go through some of the key technical observations and outline a bearish and a bullish case for Nasdaq.

In this post, I will analyze the recent ES / NQ price action from a purely technical perspective, buy and sell signals as well as conditions for the bullish and bearish scenarios.

The Twitter poll I ran yesterday indicates that the market participants’ views on the S&P500’s next move are split with a slight skew towards a more bullish outlook. If bulls are correct, the S&P500 will finally break out above the long-term diagonal resistance line and reach $4000. However, if bears are correct, we will most likely enter into a new bear market with a potential retest of the March lows.

I developed a simple concept of the ‘First Line of Support’ to help me time market reversals. The concept is very simple but powerful. By tracking futures price action, I identify important levels of demand (support) on the ES and NQ charts. If the indices breach those levels, I usually exit any long positions I might hold at a time and go short the market.

Analyzing main indices’ price action for confirmations as well as bullish and bearish divergences helps me assess the ongoing market model signal’s strength as well as potential reversal odds. Let’s review the latest price action.

When the market breaks out and hits new all time highs, it is important to observe how price moves during the first trading days after the break out. If the price reverses, it might be an early warning sign of a larger sell off to come.

The market staged a massive break out since October 2019. The main three market indices — S&P500, Nasdaq and Dow Jones — have been rising for the last several months reaching new all time highs on a consistent basis. Yet, a lot of sector ETFs failed to reach pre-2018 correction highs forming bearish divergence between these sectors and S&P500.

The market staged a relief rally during the last several days but is now rolling over. See how much each of the indices – Nasdaq, S&P500, Dow Jones and Russell – retraced since reaching the intermediate bottom.

Market started to display signs of weakness. This is evident when comparing Nasdaq to other indices. Let’s review the charts of Nasdaq, S&P500, Dow Jones and Russell.