The Nasdaq 100 is holding its cards “close to the vest” and not giving us many clues as to its intentions. Although the NQ sold off late in the day, the retest of the downtrend line at 4300 did not materialize on Tuesday, even though support at 4352 was violated on a closing basis.
That deeper pullback may happen on Wednesday, and if it does, there’s no reason to get bearish, as long as the 4300 area holds.
Meanwhile, there is a subtle bullish pattern developing in the NQ that just might trigger on Wednesday. It’s a ‘”megaphone” consolidation (see the chart at left) that, if triggered, would resolve above the resistance line at 4371.
If this happens, the bears will be put on the defensive.
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.
