NQ 100 impulsive price action likely to continue

The Nasdaq has been in a roller-coaster ride during the past three weeks. It was going sideways for a couple weeks (Doji candles in rex box) after a double top (orange box) indicated a pause in the huge uptrend (green arrow).

Daily chart

Momentum up after bearish breakout

The ET zone indicator shows how far price has moved away from the 144 ema long-term average. Price made an initial breakout below the range and ET zone 7 (orange box) followed by a continuation below ET zone 8 (orange arrow).

The bullish price action has retraced large parts of the decline (green arrow) but price action is approaching heavy resistance levels (red boxes). There are two main scenarios:

1)  Blue arrows: A bullish breakout above the resistance could see further intra-day gains towards higher highs. The bullish momentum would be primarily interesting on lower time frames as the space higher is tight and the probability of a bearish retracement increases.

2)  Red arrows: A bearish bounce could confirm the retracement at the 78.6% Fibonacci level. Price could retest the 21 ema zone which would be a key bounce or break spot. A break below 21 ema support could indicate an extension lower whereas a bounce indicates a larger reversal towards the 144 ema zone.

Four-hour chart

Key moments on one-hour chart

Price moved up 1300 points in a matter of hours. The bullish breakout above the fractals and 21 ema zone (orange box) indicating the reversal. Price has recently hit the ET zone 6 above the 144 ema zone, which is key level for the reversal.

1)  Bullish break: A bull break gives potential space to ET zones 7 and 8 (blue arrows).

2)  Bearish bounce: A bearish bounce gives potential space lower toward the Fibonacci retracement support levels (red arrows).

One-hour chart