January 3rd recap and 4th Predictions

What to Expect

With the first trading day of January completed, let us see how the day played out and what to expect tomorrow.

As we will always do, the first thing to be reviewed will be Top Half of the Daily chart. We will see how the horizontal Support and Resistance Lines from our January Monthly Prediction played out during the first day, as well as review the Moving Averages that came into play.

From there, we will look at the Bottom Half of the Daily chart to see what the momentum looks like going into tomorrow with the additional MACD and RSI indicators.

Overall, what we expected seemed to have played out as we will see below:

Top Half Analysis

With the last four trading days of 2021 being negative - as you can see from the 4 red candles before today - there was a lot of fear coming into the morning. However, based on our January Monthly Prediction, we at least had more optimism than most.

Above you can see how the white horizontal supports from the January Monthly Prediction really came into play today - specifically the top and middle white supports at $15,752.27 and $15,644.97 respectfully.

We were happy to see the NASDAQ start well above the $15,644.97 line, basically starting at the higher $15,752.27 support line. We will see more below in the hourly view; however, aside from the slight scare from the lower wick at the bottom, the day was generally optimistic.

It looks like the main reason we were able to start well above the $15,644.97 line was the 8 Moving Average. The day’s candle pretty much starts exactly on the 8 Moving Average line and went up from there.

It should be noted that the 20 Moving Average is starting to move upward towards the 50 Moving Average. It is always positive when a smaller moving average crosses above the larger one. Seeing the 20 cross the 50 would only add to the positive momentum - but that seems like it is days away from happening (if it even happens).

Overall, the Top Half technical analysis of the Dow Jones has been positive. Let us see if this carries over to the Bottom Half technical analysis as we look at the momentum indicators.

Bottom Half Analysis

Starting with the MACD, it is comforting to see the Green line so far above the Red line; the same trend we saw during the January Monthly Prediction

What is even better is that the peak of the green line may be starting to bend in an upward direction. It would be ideal to see more of a decline in the red line; however, the green line going up and the red line staying steady is positive indeed.

Keeping the positivity, it seems the RSI is actually doing the same thing as the MACD. There is a clear upward bend in the green line and red line seems to be staying flat or even declining a bit. None the less, when both momentum indicators are showing the same trend, there is nothing but positivity to be felt.

Hourly Analysis

With a solid view of the daily chart, let us look at each of the day’s trading hours between 9:30 a.m. to 4 p.m. ET, or the 7 candles above.

The first hour seemed to show the most uncertainty, with the top and bottom wick of the candles pretty extreme in length and the hour itself being negative. It was the second hour that really started to get the day rolling - smashing above all of the Moving Averages and our highest support line.

The third hour dropped a bit; however, there are 2 important things to note on this third hour candle. First thing is that we close the hour right on the 50 Moving Average and basically use that to jump up and keep the trend going. Second thing is though we drop, the key milestones to maintain were 50% of the previous candles.

With the combination of the 2 important things above, the final 4 hours of the trading day were positive and strong.

Final Thoughts and Targets

Overall, there was a lot of positive in the daily and hourly charts for the NASDAQ.

Based on the positivity from the Top and Bottom Half Analyses, we should continue to see an uptrend tomorrow.

Ideally we finish just below our new Yellow Support line or at least above half of today’s candle; as illustrated in the white box above

Good luck trading!