The Nasdaq futures traded sideways on Friday, taking a breather after Thursday’s explosive move. Unfortunately, the opening action last Thursday left a 20-point unfilled gap at 4424-4444 and the Nasdaq has definitely been in gap fill mode. That said, with the S&P 500 making new all-time highs, such irrational exuberance may not be immediately corrected.
So while a retest of Thursday’s breakout and trendline break would be normal here, the generally bullish action in the major indices, plus notable skepticism among retail investors (the AAII bullish sentiment reading is only 26%), suggests that the NQ might well attempt further advances before coming back to fill this technical void.
The next upside target is indicated on the Volume Profile chart at the High Volume Node and the UVA 2 level (4523).
A Note on Volume Profile
The histogram on the left side of the chart shows the volume distribution in the Nasdaq futures for different periods of time. Key support and resistance levels are indicated by the peaks and troughs. If you would like to receive a primer on using Volume Profile, please click here: www.daytradingpsychology.com/contact
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