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NASDAQ 100 Futures Market Bullish or Bearish Back to Articles

5/12/2020


What is the state of the stock index futures market?

The stock index futures market, since 2009, has been characterized as in a bull market. The recent global crisis which is COVID-19 has dramatically skewed the charts so to speak. So now after 4 trillion dollars plus of stimulus and partial economic re-opens, what is the state of the market?

As day-traders, we have to be able to make rational decisions on whether to buy or sell. One common technique is to first determine the market bias. Is the market bias bullish? Or is it bearish? If the bias is bullish then we're looking for places to buy, if the market is bearish then we're looking for places to sell. Now that's not everybody's technique, but that's one compelling technique.

Let's take a look at a simple line on close (LOC) daily chart for the Nasdaq 100 stock index futures market using the InfinityAT™ Charts. If you view the chart from the end of March through the present (don't look further back in time for a moment), then this market looks very bullish. We have been continually going up for over a month now! LOC charts are a better application here since they are only concerned with daily closing prices.

Infinity Futures
Source: InfinityAT™ Charts


Alternatively, if we take a look at the bigger picture that includes recent record highs you see a V shaped LOC chart that appears to be marching back up toward the highs.

Infinity Futures
Source: InfinityAT™ Charts


Adding a simple Fibonacci retracement shows that we have closed above the 61.8% for several days in a row now. I would consider that the retracement is over. Now, I understand that anything can happen and the Q2 earnings are probably going to be quite negative. However, as day traders, that’s not today.

Infinity Futures
Source: InfinityAT™ Charts


Market bias can and will change on a regular basis. It seems to me the NASDAQ 100 has a bullish bias, at least today.

Try charting these markets yourself with a real-time practice account: https://www.infinityfutures.com/charting.aspx