Volatility may spike a bit
VX is still trending down, but we would not be surprised to see it find support at 15.1 and spike from there to resistance at 16.  VX bounced from this level before on Nov 14 and got up to 17.5 before topping.

NQ
On Nov 19, NQ 4-hour chart showed its candle reaching support at the 200 EMA green line.  NQ MACD cyan line crossed over its signal orange line. This technically was the start of the latest bull swing, giving us permission to enter long NQ TQQQ when they dipped to support.  And that was what we did.  

However, on Tuesday the signal became muddled, with NQ candles running into resistance, and not able to get above 21025.  This combined with a possible rise in VX ahead of PCE key report was the reason we exited our TQQQ position.

We don't have a clear read on what NQ will do next so we're just staying on the sideline for now.   The best setup next for NQ is for it to retest support zone 20633 - 20717.  NQ may bounce from there to get up to R1 at 21250.

SOXL
​SOXL is likely to retest support in the zone 26 - 27 to form a W bottom.  Once this pattern is formed, SOXL is likely to rise and can reach R1 at 34.

TZA  TNA  RTY
RTY has formed a clear top on its 4-hour chart.  So the chart to keep an eye on is TZA.  Its 4-hour chart shows its MACD cyan line about to cross above the orange signal line thereby forming a rising W bottom.  This is a low-risk setup to enter TZA.

Brief updates tonight due to scheduling conflict.

VIX and VIX futures are still dropping which means they are still providing bullish tailwinds for equity.

On Nov 19, NQ 4-hour chart shows its MACD cyan line crossing above its signal orange line.  This indicator was signaling that a new bull swing was getting started on that date.  This pattern is still intact, so NQ is technically in a bull swing.

On Nov 21, VX (VIX futures) 4-hour chart shows its MACD cyan line crossing below its signal orange line.  This indicates that volatility was going to drop.  This pattern is still intact, further confirming that NQ bull swing is in effect, 

As anticipated, NQ did dip early Monday, but NQ managed to bounce at  20755 and is likely to keep marching up.  

​This bull swing may run into resistance at the following levels.

• NQ:  21700
• TQQQ:  85​
• SOXL:  32
• TNA:  59

Our personal trade plan
After a couple of fumbled attempts, we bought TQQQ at 77.46 with the goal of exiting at 85.  Click here for Signal Trades spreadsheet.
​
Disclaimer
The information presented here is our own personal opinion. Consider it as food for thought.  We are not offering financial advice. We are not promoting any financial products. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections.  You are proceeding at your own risk if you follow our trades.​​​​​​​​

Big picture context:  aging bull
As we started explaining last week, NQ is currently in the 4th bull cycle within the bull trend.  (Bull trends last multi-months to multi-years.  Bull cycles last multi-weeks to multi-months.  Bull swings last multi-days to multi-weeks.)

• 12/27/22:  NQ Weekly Chart Bull Trend started.
• 12/27/22 -7/19/23:  1st Bull Cycle within Bull Trend.
• 10/27/23 - 3/4/24:  2nd Bull Cycle within Bull Trend.
• 4/22/24 - 7/1/24:   3rd Bull Cycle within bull Trend.
• 8/5/24 - ? :   4th Bull Cycle within Bull Trend

Nasdaq percent of stocks above 200-day MA (Stockcharts.com: $NDXA200R) continues to decline, forming a pattern that typically led to bear trends in previous years. See $NDXA200R weekly chart below.  Its 20-week EMA blue line is about to cross below its 200-week EMA green line.  This bearish setup confirms our aging bull theory.

However, an aging bull is not a dead bull yet.  Right now, equity still has declining VIX on its side.  VIX finished forming a top by early Nov and began to drop hard.  ​This is confirmed by its weekly MACD cyan line crossing below its orange signal line. 

What this all means​ is that we can expect to see volatility continuing to decline.  VIX may dip into the low zone 12 - 13 before it starts to base.  It is this basing pattern that will be the wake up call for bulls to prepare for rising volatility again.  But no worries!  It's not here yet.

NQ weekly chart below shows the 4 bull cycles so far in this bull trend that started on 12/27/22.  Note NQ bullish weekly candle pattern formed recently in the rising channel shown below.  So again, the bull may be aging, but it still has some strength in it.  

NQ 4-hour chart below shows its MACD cyan line crossing above its signal orange line on Nov 19.  This indicator was trying to tell us that a new bull swing was getting started on that date.  It's a low-risk setup to scale into NQ by buying intraday dips.​  We discussed and took advantage of this setup with a quick TQQQ trade ahead of NVDA earnings.

​To further confirm that the bull swing is in effect, VX (VIX futures) 4-hour chart below shows its MACD cyan line crossing below its signal orange line on Nov 21.  This means we can expect volatility to drop more. 

Knowing that equity has bullish tailwind support from VIX and VIX futures for another few weeks, we are projecting that NQ will surpass R1 at 21250 to reach R2 at 21700 in early December.  However, NQ may still drive bulls crazy by dipping one more time into the support zone 20600 - 20700 before taking off on Monday.  ​

Big picture context:  aging bull
As explained on November 21 post, NQ is currently in the 4th bull cycle within the bull trend.  (Bull trends last multi-months to multi-years.  Bull cycles last multi-weeks to multi-months.  Bull swings last multi-days to multi-weeks.)

• 12/27/22:  NQ Weekly Chart Bull Trend started.
• 12/27/22 -7/19/23:  1st Bull Cycle within Bull Trend.
• 10/27/23 - 3/4/24:  2nd Bull Cycle within Bull Trend.
• 4/22/24 - 7/1/24:   3rd Bull Cycle within bull Trend.
• 8/5/24 - ? :   4th Bull Cycle within Bull Trend

This is an aging bull.  So it's time to be cautious.  We can continue to trade bull swings within this bull cycle, but we can only aim for limited profit.  Holding on for really big profits can work against us quickly in this type of market.

NQ is starting a bull swing
On NQ 4-hour chart below, its cyan MACD line crossed above its orange signal line on November 19.  This officially launches the bull swing, though NQ price is still stuck in a choppy pattern in its support zones.  As long as NQ stays above its 200 EMA green line, the bull swing is intact.  

Low-risk setup:  enter NQ when it dips into support zone 20600 - 20700.  Exit at 21250, unless NQ and VX MACD patterns strongly suggest bull swing is still not done yet.

Similarly, enter TQQQ when it dips into support zone 75.9 - 77.  Exit at 84.

NVDA
We are taking a break from trading NVDA as its charts are starting to lean bearish.  However, we don't feel comfortable betting against NVDA right now, so we are just going to monitor it in the background.

SOXL
Low-risk setup:  enter SOXL when it dips into support zone 26 - 27.  Exit at 32, unless NQ and VX MACD patterns strongly suggest bull swing is still not done yet.

TNA
Low-risk setup:  enter TNA when it dips into support zone 49 - 50.  Exit at 56, unless NQ and VX MACD patterns strongly suggest bull swing is still not done yet.

Our personal trade plan
We did a quick test of TQQQ on Thursday, but didn't manage to get in at a favorable price.  So we are going to re-enter with new buy orders.   As described above, the low risk setup for TQQQ is to enter TQQQ when it dips into support zone 75.9 - 77.  Exit at 84.
​
Click here for Signal Trades spreadsheet.
​
Disclaimer
The information presented here is our own personal opinion. Consider it as food for thought.  We are not offering financial advice. We are not promoting any financial products. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections.  You are proceeding at your own risk if you follow our trades.​​​​​​​

NVDA earnings was excellent, but shares still fell a bit after hours as investors were still somewhat disappointed.  Read more here.
​
A time to be cautious
It is not surprising that investors are becoming wary of stocks that have been highly bullish.  NQ weekly chart below shows that we are in the 4th bull cycle within the big bull trend that started on 12/27/22.   MACD on NQ weekly chart shows a lower high pattern forming while price reaches for higher high.  This bearish divergence usually appears as the bull trend approaches the end.

But approaching the end is not the same as ending right at this moment.  So bears should be cautious about jumping in with both feet right now.  At the same time, bulls don't want to hang on to new positions for too long.  Riding an aging bull can be tough.  

The best strategy is to find low-risk setups to enter bull position and aim for limited profit.  Lock in this profit and get out.  Don't try to ride any swing end to end as you may find your profit evaporate quickly.

​Watch out for bear traps and bull traps based on volatility
VX daily chart below shows that it has surpassed resistance at 17.1 on Wednesday, and rose up to tag 17.6.  VX pattern shows that it's likely to form a top in the zone between its 50-day EMA red line and 200-day EMA green line (18 - 19).   Once the top is formed, VX will drop.  This is a bear trap in the making, and not a good place to go full blown bearish.

Once VX steadily drops again, the time for bulls to worry is when VX starts to base, most likely in the zone 13 - 15.  When VX starts to base, equity might be marching up steadily perhaps as part of a Santa rally.  And that's the time for bulls to be cautious of bull trap.

​We need to see NQ bullish confirmation in UVXY chart.  Ideally UVXY will close the gap by spiking up to resistance at 25.45 to form a clear top before dropping.  This will provide bullish tailwind for NQ.

Is the market going to dive after NVDA earnings like it did in August?
​The answer according to VVIX (volatility of VIX) is unlikely.  Volatility conditions were quite different back in August as compared to now.  VVIX daily chart below shows its 20-day EMA blue line forming a topping pattern after 4 tops, and this pattern is still intact.  

Furthermore, VVIX 20 EMA-day EMA blue line is about to cross below its 200-day EMA green line.  Once this happens, this blue line is likely to stay below and trends down for a while.  This is very supportive of equity.

VX (VIX futures) daily chart below shows a similar topping formation.  VX has formed 4 tops since August.  Its 20-day EMA blue line crossed below the 200-day EMA green line on 11/5, then crossed below the 50-day EMA red line on 11/11.  It's going to take a fair amount of fear for this blue line to rise above the EMA ​50-day EMA red line.

Still that does not mean VX won't make a 3rd attempt to surge above 17.1 resistance level.  It failed the first 2 times.  It is likely to fail again, but VX is likely to make that push attempt still.  VX 200 EMA green line on its 30-min chart below is trending up.  We think this push will happen after NVDA earnings.  

NQ
So what does this mean for NQ movements?  As VX pushes that one last attempt to get above 17.1, NQ is likely to retest key support at 20383.  As long as NQ can hold this support level, a W bottom pattern will form and enough buyers will come in to enable NQ to rise up to retest resistance at 21340 again.

TQQQ: Will follow similar path to NQ.  

• Support:        73.1
• Resistance:   84

NVDA: Will follow similar path to NQ.  

• Support:        140
• Resistance:   150

NVDL: Will follow similar path to NQ.  

• Support:        74.5
• Resistance:   86

SOXL: Will follow similar path to NQ.  

• Support:        26.18
• Resistance:   36

TNA: Will follow similar path to NQ.  

• Support:        45.54
• Resistance:   56.6

Our personal trade plan
We have to be out of the office all day Wednesday unfortunately. So we have decided to close our full TQQQ position for now and will monitor Thursday for re-entry.

Click here for Signal Trades spreadsheet.
​
Disclaimer
The information presented here is our own personal opinion. Consider it as food for thought.  We are not offering financial advice. We are not promoting any financial products. We are not registered financial advisers or licensed brokers. We make no guarantee that anything will unfold according to our projections.  You are proceeding at your own risk if you follow our trades.​​​​​​​

Volatility:  bullish tailwind
VVIX (volatility of VIX) daily chart below shows a top formation pattern that has been in place November 5.  VIX is now providing bullish tailwind for equity.  So our trades should focus on bull swings.  

NQ
NQ 4-hour chart below shows that its MACD is about to have a bullish crossover from below.  This is a 4-hour trend change signal.  So we should monitor for the formation of the W bottom.   Look for NQ retesting S1 at 20400 and rising from there to retest R1 at 21250.   TQQQ retests S1 is at 73.3 and rising from there to R1 at 83.

The good news for equity bulls is that VVIX (volatility of VIX) weekly chart continues to show its 20-week EMA blue line forming a top above its 200-week EMA green line.  This suggests volatility is likely to go down, at least until that blue line drops below 90.  

NVDA - See NQ discussion above

• Bullish setup:  basing in support zone 137 - 140 ahead of earnings.  NVDA can rise up to R1 at 150.
• Bearish setup:  NVDA gets stuck in the resistance zone 148 - 150 ahead of earnings.  NVDA can drop to next support zone at 130 - 132.

TNA - TNA isn't going to be affected by NVDA earnings as much as tech stocks.    ​​

• S1 support is at 45.  This is a strong level and TNA is likely to bounce from here.  It can rise back up to R1 at 56.6 from this support if VX is supportive.
• S2 support is at 39 - 40.  If TNA can fails to find support around 45, it can drop sharply down to S2.  Then from here TNA may bounce and rise back up to resistance at 50.

Read here for more analysis of Powell's comments on Thursday. 

How do we know this is a dip and not a crash?
​VVIX (volatility of VIX) daily chart below shows its 20-day EMA blue line is still forming a topping pattern above the 200-day EMA green line.  This means that while VIX may spike, the setup does not support a crash in equity.

Still, there is a quick volatility spike that’s about to happen.  VIX weekly chart shows VIX has formed a contracted hammer candle at support at 13.59.  It most likely will spike up to retest resistance at 16.82 before dropping again.

VX is going to spike also, likely up to the zone 17 - 17.3 before dropping again.

Where will the dip bottom out?  Below are the updated key support levels where the bottoms may occur.  Here's what we want to look for NQ SMH NVDA TNA.

1. Price dipping into the projected support zone.
2. Price candles form a W bottom similar to Nov 4.
3. MACD indicator: MACD blue line crosses above signal red line from below 0, similar to Nov 4 MACD pattern.

NQ key support:  20600 - 20700

SMH key support:  237 - 240
It's important at this point to keep an eye on SMH rather than SOXL to take the true temperature of the semiconductor sector.  SMH is the 1x semiconductor ETF while SOXL is 3x so it's heavily weighed down by contango.  

It's important for SMH to find support in this zone to recover its bullish momentum.

NVDA key support:  137 - 140​

​Not much has changed from yesterday.  Here is an update on CPI and the impact on the Fed’s rate cut.

Volatility:  look for a quick spike
VIX futures (VX) 4-hour chart below shows that it is basing near the support zone 15.25.   This basing process may continue until VIXEx next Wednesday Nov 20.  Once the current contracts expire, and after NVDA earnings on that same day, we may see VX spikes up briefly to 17.  That would confirm the opportunity to buy the dip in NQ and others.

​NQ
NQ is forming a pattern quite similar to its pattern around August 28 (last NVDA earnings).  See highlighted areas in NQ 4-hour chart below.  Again, we still think NQ dipping to the zone 20700 - 20800 is a good opportunity to buy the dip.  NQ may rise as high as 22000 by year end.

​SOXL
Yesterday we wrote: “SOXL is likely to need to retest recent low of 29.25 to bring in enough buyers to rise up”.  This does appear to be happening right now.  If SOXL can stay in the current zone near 29.25, starts basing for multiple days, it may gather enough momentum to surge out of the triangle, reaching 40 by year end and 46 by late January.

​NVDA  NVDL
NVDA is forming a top similar to the one it formed just before the last earnings on Aug 28 as shown in its 4-hour chart below.  Wait for NVDA to dip back to support in the zone 137 - 140, accompanied by the quick spike in VX.  That’s the low-risk setup to buy NVDA for the remainder of this big bull swing.  NVDA may reach 156 by year end.

For NVDL, the support zone is now 73.25 - 75.35.  This is a buyable dip.  NVDL may reach 92 by year end.

TNA
Prior to Tuesday we wrote this about TNA:  “under the hood momentum is waning…Now is not the time to chase TNA up”.  TNA top started to form on Tuesday, continued through Wednesday, and is likely to continue on Thursday.

Best to wait for TNA to dip back to support in the zone 46.5 - 47.8, accompanied by the quick spike in VX.  That’s the low-risk setup to buy TNA for the remainder of this big bull swing.  TNA may reach 67.8 by year end.