Market Analysis and Trades for 12/12
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The weekly post for SPY 0.00%↑ and QQQ 0.00%↑ should be reviewed prior to this. It can be found here Market Analysis for the Week of 12/7
We finally got the liquidation break this market needed, and we once again see how strong it can be after. I explain this each time I call for a liquidation break. Liquidations of longs strengthen the market. It rinses out the weak, tired hands and allows fresh stronger bulls to enter at a discount. I called for 1-2% and ES dropped 1.3% from high to low with NQ dropping 1.9%.
Last night the door for weakness was open back below NQ 25726-25736. Sure enough, it dropped nearly 400 handles to the overnight low in a fantastic liquidation. From the weekly plan, it came into the massive 25369-25388 spot (overnight low 383 and cash hours low 390.25):
The importance of this spot is apparent even without a volume profile.
After the AVGO 0.00%↑ reaction was initially strong afterhours, it gave back the entire move and more, gapping NQ below 726-736 again. Will tonight be another repeat performance?
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