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November 22 Chart of the Day - NASDAQ

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Today we turn our focus on the NASDAQ futures (ticker /NQ) and one of the important questions we continuously try to answer is: Where could price go?

This is totally different than predicting or calling tops or bottoms.  Once we've determined the answers based on price action technical analysis tools then we develop our "battle plan" chart.  One that includes the price levels in both directions from which we create pre-determined trade plans.

Regardless of what the economic headlines say the charts often speak their own language.  Traders trained and skilled in interpreting what the charts are saying tend to have the most consistency with their results.

Starting on the monthly chart we can see that price has been behaving in a technically correct manner (unless you're a "permabear").

Using Fibonacci alone we see that price held the 61.8% Golden Ratio retracement pretty much to the tick.  Technically speaking, this puts the -23.6% Fibonacci extension level at 19160.24 in play as a potential target. And yes, this would create new all time high (ATH) levels.

Realizing that price rarely, if ever, moves in a straight shot and cycles across all time frames we can use additional price action tools to help identify the cycle levels and create bi-directional price levels of interest.

On the weekly chart, we used Advanced High to High (H2H) Fibonacci anchors (in orange) and trend to identify levels of interest that in this case worked out magnificently.  This cycle creates a potential target at the current ATHs.

Down on the daily chart we can see additional levels, including potential overhead resistance as price continues to cycle up and cycle down.

We've used a variety of tools here to help answer the question of where price could go on this time frame.

Ultimately, the levels are never determined by what we personally think should or could happen.  Rather, we've learned to listen to the charts in an attempt to hear what it's telling us.

So what's next? 

We don't make predictions...

Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

Take a look at the charts and let us know what you think.  

We'd like to hear from you in the comments sections.

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