In the daily time frame, the Nasdaq 100 mini futures had a nice bounce off support while forming three consecutive "Bull Flag" type patterns on the 5 minute chart with very strong market breadth internals yesterday.
(Click on chart to expand)
A different look at the chart below shows the daily chart in a "Bull Flag" type pattern as well. A look at the 1 hour chart left hand side below shows this close up. What I think is important to note, is the increasing volume in the flag on the daily chart. What I would rather see if I was currently long in a swing or position trade would be a decrease in volume in the flag in order to give me confidence of holding on and adding to the trade on a breakout. That would be the most bullish scenario from a perspective of "probabilities". I think we are intermediate term in a downward trend until the bulls can at minimum get a breakout off the flag with a significant increase in volume.
Any bearish market internals today with the proper bearish pricing pattern will have me ready to execute on the short side. Perhaps a winning trade into the close will be left to ride toward the lower return line target of approximately 2,640.
I have included the "Volume Profile" on the daily chart. The volume profile shows the market volume by price and not by time. Should the bull flag fail or breakdown then the "High Volume Node" at 2,316 might be a legitimate target in my opinion with the proper risk management, trade management, and position sizing/money management.
Keep in mind 2,316 target is not a "prediction". It is too early to target that now in my opinion. What I am doing is looking ahead and preparing a possible trade plan, based on what I see "today". Any and all of my views can change without notice.
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Source: www.scottpluschau.blogspot.com/2012/04/nasdaq-100-bounces-off-support.html
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