Thursday Update: Ticking Time Bomb


This has been an uneventful week for the market. That would be fine with us, except that we trade options and time decay is not our friend. The good news is that market calm never lasts too long and the moves coming out of it usually more than make up for price erosion from the loss of time premium. The bad news is that global markets are being held hostage to China-US trade talks, a ticking time bomb, one way or the other. 

Key Levels - Nasdaq 100 

This is one of the most obvious tells on all of my charts. Note how the Nasdaq 100 has moved up nicely within its trend regression channel from the December 2018 lows. But also note how the short-term peaks along the way have been further and further away from the top of the channel (red arrows). Finally, note how current price movement is being compressed within a horizontal channel between about 7000 and 7100. One of those two levels will give way and we can assume that the direction that of the break will be the market direction not only for the Nasdaq but for the entire market going into March, maybe longer. If the break is down, two other key levels are represented by the red horizontal support lines. If the third one is broken, the market is headed back below the December lows around 6000. 

Next Update: The Weekend Update on Saturday (with an interim update on Friday, if necessary).