NASDAQ Stock Index Wide Picture Overview
I use daily TF, data from CME, futures market.
I did divide the chart into components - waves. Let’s analyze every component and combine them into the opinion.
A) Upwave 10/March-2/May. This upwave formed a busy trading range (1) around 7375, and culminated on 7850 level (2). We can see a spike in profile (2), this is distribution stage. I believe, news was good. And professional operators unload their holdings onto buying rush of FOMO public.
B). Downwave started on Monday 05/May. We got 4 red candles in a row, the first time for a long time. Volume did increase. Declining price amid falling price - is the typical bearish behavior. If Chart reader were able to detect the distribution range at the top of up-wave A, this decline did not make a surprise for them.
Note, price bounced up (3) from profile spike (1). But we can see ND sign (lack of buyers) at the top of bounce movement (15/May). As a coincidence, the supply did arrive on 16-19/May.
Downwave B Culminated in form of Panic volume spike and Fake penetration (SLKB) of the low of the up-wave A. Many investors had to turn bearish (enter shorts) because their systems detected the first lower low. But it turned into the Trap for them.
C) The general shape of up-wave C builds the vision of letter “P”. We have a lot of volume at the top of the wave. As you can see, profile spots the spike at 7950 level (4). How can we interpret it? Another range of Distribution? Oh yeah. Market penetrated the top of the up-wave A. Many investors had to turn bullish (enter longs) because their systems detected the higher high. But it turned into the Trap for them. 25-28/July were No-Demand days.
D) On 29/July, the new Supply-wave did start. It culminated (Intraday Panic Selling 05/Aug) at the level of horizontal spike (5). That downwave formed shape with profile spike 7475 (5). Later. this level was tested (6). And after SLKB Trap on 25/Aug (7) …
E) …a new up-wave was started by Demand Bar on 4/Sep (8). But as you can see, the character of the movement is not very speedy and easy.
So, what is the judgement?
We have HEAVY supply around 8k level. Despite the market is trading within current up-trend wave, IMO, bulls have no enough power to overcome 8k Resistance soon.