QQQ VWAP Based Entries

When price moves from below to above an AVWAP decisively, it signals short covering & a shift in control from sellers to buyers & when 2 or more AVWAPs converge liquidity concentrates, reversals or breakouts often happen there & these are the spots where traders take reversal trades, breakout entries, or stop placements

• Right now, the 3 & 21 November AVWAPs are separated, meaning trend strength
  
• When they converge, it signals compression
  

1. Using AVWAPs as a dynamic stop-loss is one of the simplest & most effective uses

• If you're long above the 21 November AVWAP, the rising blue AVWAP is your dynamic stop
  
• A close below it should signal an exit
  
• It reflects the average buyer cost basis, not arbitrary price levels
  

2. An AVWAP is a useful trend filter

• Price above rising AVWAP(s) suggests a long bias
  
• Price below falling AVWAP(s) suggests short bias
  
• When price chops around a flattening AVWAP, stay out
  
• AVWAP is a trend health indicator
  

3. AVWAP + candlesticks = clean entry signals

• The strongest signals come when price pulls back into an AVWAP, prints a small reversal candle (hammer, doji, engulfing) & ATR is declining (just like now) since these become high-quality continuation entries
  

As a high-level playbook, anchor VWAPs at major pivots (highs, lows, breakdowns, earnings gaps), trade pullbacks into rising AVWAPs during uptrends & trade rejects from falling AVWAPs in downtrends

• Use converging AVWAPs as inflection points
  
• Use the nearest rising AVWAP as your stop
  
• Anchor to the close if the candle represents an event you want to capture (breakout, breakdown, a clear reversal bar, a candle where closing price indicates the market's verdict, earnings, FOMC, etc)
  
• Anchor to (H+L+C)/3 (the “typical price”) when you want a smoothed, less-biased VWAP for longer-term structures or swings
  Typical price reduces noice from intraday spikes & avoids sensitivity to one extreme print or over-reaction to the tails on the candle (AVWAP from swing highs/lows or the start of a trend)
  

Price is above all AVWAPs

• This means all meaningful “cost basis cohorts” are beneath price
  
• The market is structurally repaired, at least in volume-weighted terms
  
• Overhead resistance from anchored supply does not exist right now
  
• This is a very different situation from when AVWAPs are stacked above price
  

The ATH AVWAP is rising & firmly below price

• This is one of the best signs of long-term trend health in AVWAP analysis
  
• When the ATH AVWAP is rising, decisively reclaimed & acting as near-term support, it usually tells you the prior correction has been fully absorbed
  
• Longs from the top are no longer underwater
  
• Selling pressure from those prior buyers is neutralized
  
• Trend followers using AVWAP logic have flipped their filters back to “risk-on”
  
• This is an objective, mathematical read & not a prediction
  

The 3 & 21 November AVWAP are now support layers

• 3 November (red) are breakdown-day sellers who are now underwater & this is a bullish dynamic because they can’t apply pressure
  
• 21 Nov (blue) are capitulation low buyers, still profitable & in control - primary support
  
• Together, these form a layered support around $605-$612, or the area where dip-buyers have historically stepped-in
  
• A stop-loss location for AVWAP-based trading systems
  

Now that price is above all 3 major AVWAPs, the focus shifts to behavior around the ATH AVWAP & since price is above it already, there are only 2 meaningful reads

1. Bullish continuation setup
2. Price may pull back to the ATH AVWAP ($618)

• Find buyers (hammer, doji, small-range reversal) & then move away
  
• This is one of Brian Shannon’s highest-probability setups (reclaim AVWAP → pullback → higher low → continuation)
  

Potential warning setup because trend deterioration begins with this move

• Price closes below the ATH AVWAP
  
• Then stays below it for multiple sessions
  
• Slope begins to flatten or roll over
  
• This would be your first objective sign that the trend is losing strength from an anchored-volume standpoint
  

The chart shows the exact 3 level anchored VWAP system that institutional traders use

• A correction-low AVWAP (21 November)
  
• A breakdown-event AVWAP (3 November)
  
• A structural high AVWAP (ATH)
  

This lets you map out short-term trend control (blue), intermediate-term supply absorption (red) & higher-timeframe trend health (gray) & right now, all of them say the same thing

• Price is in a state of repaired, orderly trend with all major AVWAPs providing support beneath
  

ATH AVWAP

• Defines trend health at the highest timeframe visible on your chart
  
• Swing traders, late buyers at the highs, trend-following algos
  
• When price is above the ATH AVWAP then the uptrend is structurally intact
  
• When price is below it then long-term players are underwater, trend is suspect
  
• QQQ is above the ATH AVWAP (~$618)
  
• This means that ATH buyers are profitable again
  
• The first high-quality pullback often tags this line in early trend repair phases
  
• A reclaim → retest → hold sequence is extremely bullish behavior
  

3 November breakdown AVWAP

• Tracks sellers from major breakdowns or panic candles
  
• Funds that sold into weakness, systematic risk-off flows
  
• If price is above it then that entire selling cohort is underwater
  
• These traders become forced buyers on pullbacks or breakouts
  
• AVWAP ~$610
  
• Price is above it then supply from that breakdown is absorbed
  
• This AVWAP becomes support on deeper pullbacks
  
• If price tags it then watch for immediate dip-buying
  

21 Nov AVWAP - capitulation

• Tracks the cost basis of buyers who stepped in at the emotional low
  
• Aggressive reversal traders, deep-value algos, CTA re-leveraging
  
• This is the most important rising support line in the model
  
• When price is above it, the reversal cohort is still in control
  
• A close below it often signals trend exhaustion
  
• AVWAP ~$605
  
• Price is well above it & the slope is rising aggressively
  
• As long as price respects this AVWAP, the recovery trend remains clean
  
• If price pulls back to it then this is a high-odds rotation/continuation buy point
  

Long-Term AVWAP

• This is the long rising AVWAP on your chart (~$592)
  
• It acts as deep trend support
  
• The line separating bull vs bear structure
  
• The highest timeframe “fair value” of the entire trend leg
  
• A tag here marks trend reset, not breakdown
  
• A break below this layer shifts the market into caution
  
• This long AVWAP is safely under price so the long-cycle trend remains intact
  

When all layers are stacked in ascending order like this, you get a fully aligned bull structure, clean pullback architecture, no overhead VWAP resistance, multi-cohort profit alignment & strong continuation behavior

• This model is about control, not prediction & right now, the bullish alignment is simply a fact of structure
  

These levels come directly from how institutions trade AVWAPs

1. ATH AVWAP (~$618) is the light pullback, common after a fast push off a low

• Signals to watch for include a hammer/doji at the AVWAP
  
• Lower wick rejection
  
• ATR contraction & reversal
  
• Reclaim → hold → push
  
• This is the first layer most swing traders buy
  

2. 3 November AVWAP (~$610)

• This is the mid-depth pullback
  
• It’s usually triggered when short-term longs trim
  
• Expect a strong buyer reaction
  
• 1-2 days of stabilizing candles
  
• Momentum traders stepping back in
  
• This is a very strong continuation level in AVWAP systems
  

3. 21 November AVWAP (~$605)

• This is the high-value dip
  
• This line is VWAP traders’ favorite
  
• It represents the true reversal cohort’s cost basis
  
• It has been respected perfectly
  
• It rises steadily each day
  
• It marks the “line of trend continuation”
  
• If price reaches this AVWAP, this is often the highest-probability buy in the entire structure
  
• Rejecting here = trend continuation
  
• Closing below = trend fatigue
  

4. Long-Term AVWAP (~$592)

• This is the deep reset, not a casual dip
  
• If price ever hits this momentum is gone, trend is resetting, higher timeframe traders reassess, hedge funds rotate & isk allocation shifts
  
• This is not a breakdown, but it is a significant tone-change
  
• You rarely see this tested unless markets enter a broader digestion phase
  

Given the current AVWAP spacing & slope

• $618 (ATH AVWAP) is highly actionable
  
• $610 (3 November AVWAP) is a strong level
  
• $605 (21 November AVWAP) is an institutional-grade support
  
• When price is above all 3, VWAP traders don’t look for tops - they monitor control transitions