As noted last Friday, there’s nothing more bullish that a failed bearish pattern. The Nasdaq 100 is now flirting with all-time highs, while the small-cap Russell 2000 has achieved that distinction almost daily.
As we have had decent volume on the price surge, the Volume Profile Point of Control (VPPOC) is now at 4524. This level should act as a stabilizing price magnet and I expect the market to oscillate around it until the opening up-gap from Monday is filled (dotted red lines).
This gap is now a short-term target, but the initial upside target is still the 127% Fib extension at 4607. This would be a first step toward completing the bigger picture megaphone pattern illustrated on the chart.
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
