Our research team has identified a potential trade setup in QID that correlates to our ongoing analysis of the US stock market and our Advanced Fibonacci Price Amplitude Arcs. We believe a major price inflection point is setting up in the US stock market within the next 48 hours that may prompt a price trend reversal in the NASDAQ and other major US stock market indexes. This pattern correlates to a much longer-term Head-n-Shoulders pattern that is also setting up in the SPY.
Our belief is that technical traders should wait for confirmation of this setup before entering any new trades, yet we believe we will have confirmation of this setup within 3 to 5 trading days – given the urgency of the setup with our Fibonacci Price Amplitude Arcs. We believe a right-shoulder could be forming as the US stock markets push a bit higher in early trading this week. We believe the Fibonacci Price Acr’s are suggesting a major inflection point is preparing to disrupt price trends.
Just to be clear, this is a prediction, and as technical traders, we wait for confirmation before trading. This is the #1 issue with most traders. They jump the gun and buy into a trade idea before the price chart has confirmed and they lose a lot of money. Follow price, don’ try to lead it.
If our analysis is correct, we may see a fairly strong trend reversal over the next 5+ trading days as this pattern/setup complete and confirm.
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Daily QID (Inverse Nasdaq ETF) Chart
This Daily QID chart highlights the major RED Fibonacci Price Amplitude Arc that is setting up as well as the more narrow MAGENTA Arc. Both of these arcs are aligning very close to one another. Additionally, the RSI suggests any trend reversal to the upside could prompt a moderately large upside price trend.
NAS100 Daily Chart
This NAS100 Daily chart highlights the right-shoulder of a longer-term price pattern that we believe may be ending soon. If our analysis is correct, the right-side of the Head-n-Shoulders pattern may set up near the PURPLE Arc on this chart (or soon after) – prompting a broad downside price trend in the US stock market.
Longer-Term Weekly SPY chart
This longer-term Weekly SPY chart shows the Head-n-Shoulder setup that is forming in the SPY. Although the right side of the shoulder is rather short and volatile, we believe this setup may be a fairly strong potential pattern warning of a stronger downside price trend that may initiate soon. Obviously, 240 (previous lows) would be an easy objective in the SPY if this happens.
Current price levels suggest a resistance level has been reached. If this resistance level persists in containing price and creates a Head-n-Shoulders pattern, there is a very strong likelihood that a broader downside price move may present real opportunities for profits. Skilled traders should prepare for this potential and watch for confirmation of this pattern/setup.
If you are using our free public research for your own trading decision-making and/or using it as an opportunity to find and execute successful trades, please remember you are the one ultimately making the decisions to trade based on our interpretation and free research posts. We, as technical traders, will continue to post new research articles and content that we believe is relevant to the current market setups.
If you want to improve your accuracy and opportunities for success, then we urge you to visit www.TheTechnicalTraders.com to learn how you can enjoy our research and our members-only trading triggers (see the first chart in this article). If you are managing your retirement account or 401k, then we urge you to visit www.TheTechnicalInvestor.com to learn how to protect your assets and grow your wealth using our proprietary longer-term modeling systems. Our goal is to help you find and create success – not to confuse you.
Our researchers will generate free research on just about any topic that interests them. As technical traders, we follow price, predict future price moves, tops, bottoms, and trends, and attempt to highlight incredible setups that exist on the charts. What you do with it is up to you. Visit www.TheTechnicalTraders.com/FreeResearch/ to review all of our detailed free research posts.
In closing, we would like to suggest that the next 5+ years are going to be incredible opportunities for skilled traders. Remember, we’ve already mapped out price trends 10+ years into the future that we expect based on our advanced predictive modeling tools. If our analysis is correct, skilled traders will be able to make a small fortune trading these trends and Metals will skyrocket. The only way you’ll know which trades to take or not is to become a member.
Chief Market Strategist
Founder of Technical Traders Ltd.