Market Update: NDX100 posts surprise rally reversal pattern starting to form?
Today we are starting to watch what could be, the development of a reversal pattern on the NDX100 D1 chart.
I’m sure we’re all aware of the disaster the markets faced yesterday. The script went to que as we watched stock indexes plunge after news that Russia had invaded Ukraine hit the markets. The continuation of what had been a long sharp downtrend on the NDX100 and other major stock indexes.
But, what a lot of us may not have seen coming was a risk recovery late in the US session. Not only did stock indexes reverse losses, but other risk markets followed, and safe havens plunged, refer to gold. Why did we see the change in momentum? Could markets have simply reached a value point and shaken off the news? Could news of Russia’s offer to sit down and talk with Ukraine spur buyer interest?
Regardless of the reason behind this, we are looking at levels and patterns to form an opinion of the current picture. Firstly, we can see that the low stopped in a demand area and for now price closed firmly above the test. Another pattern we are starting to watch is in early development but has started to show some shape.
That pattern is an inverse head and shoulders, which can be reversal patterns. We have the first shoulder and a head, but we still need a second shoulder, and a break of the neckline to fully confirm a completed pattern. This is definitely something to keep in mind but as mentioned, it’s still a fair way off.
For now, we want to see buyers continue to post gains to show control, and traders still need to keep the macro situation in mind as any escalations could resume the selling.
NDX100 D1 Chart 
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