The NAS 100 managed to break the top of the neutral box last night. The top of the neutral box should now provide support and a launching pad to go higher. That said a bearish harmonic a now in play as well coming into 13500. The harmonic completion zone is likely to act both as a magnet for price and then resistance. Watch for a reversal pattern in the red box. A break above the red box after a weak pull back would be very bullish. If that were to occur my next upper target would be the 886 retracement then ATHs.
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Price right at the completion zone after a very bullish move. Caution is warranted. I still expect a pull back here. Price may want to make a full measured move first though so that would take it to the top of the red box.
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If it pulls look for this trendline and green box to provide support.
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Keep in mind that the harmonic I posted does not get invalidated until it breaks 13910. This mean we should remain cautions in the near term as the market can roll over quickly. Be especially careful using weekly call options as premium will evaporate if price pulls back at these levels.
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WoW.. What can I say ... that is quite the move. Barely paused at the completion point and seems intent on at least touching the high. I'm still not chasing any names, just trimming positions into this move. Its going to be an interesting Friday. Usually when big harmonic patterns like this are invalidated it means the instrument is beginning a strong trend. So a break above the high would be very bullish going forward.
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Broke the 13910 so the bearish pattern is negated. That said if I was shorting the harmonic my stop would be a the 1.13 fib extension which is at 14127. That level can be used as a target for longs or an area to expect resistance.
