Nasdaq 100: Camarilla Levels Hold – Strong Reversal in the Cards With CPI Looming
2025.01.15 07:26
The relationship of volume and price at significant support and resistance levels is an integral part of VPA, so marking these zones on our charts in multiple time frames is essential. As a reminder, levels on a slower time frame always carry more weight and will always impact the price action on the faster charts. How we identify these levels or zones is a matter of personal preference, and for myself and David, we use a combination of standard metrics such as moving averages and our proprietary indicators that are available from quantum trading. 
We also stress to our students that the relationship between price action and volume at these levels will validate the support or resistance level in question. I can best explain this with an example from today’s hourly chart for the (ETF for the . For perspective, we must bear in mind the current market environment is volatile due to worries about rising bond yields, a strong , and a resilient labour market, all suggesting the is unlikely to cut rates at this month’s meeting. This is also borne out by the CME Fed Watch Tool, which today displays a 97% probability that this will be the case. As an aside, I have read this is one chart FED members pay close attention to, and so should we, not least because this figure is constantly updated.
Returning to the hourly chart for QQQ, we can see that the ETF sold off in the pre-market at 9.00 am London time, where it posted a widely spread volatile candle. The purple arrows on the candle are the Quantum volatility indicator, which triggers in real-time when the price action is outside the ATR for this timeframe. When this happens, we can almost always expect the price action to retreat inside the spread of the candle, where it will either congest or reverse. What is also significant about such a candle is that the high and low become important levels in their own right. What happened here is that QQQ did bounce higher until the cash market opened, when it moved lower, but significantly did not break the low of the volatility candle. Note also the volume on the opening candles of the session, and in particular the third down candle—it is falling, suggesting a lack of selling pressure. Second, the candle is also at the S3 Camarilla pivot, where the price almost always pauses and often reverses if there is a lack of momentum.
Once we have a reversal, the next question is where next for the price action, and once again, we consult the levels on the chart for potential pause points and/or pullbacks. For QQQ, the most significant is the volume point of control, which sits at the $513 area, but the first objective is to take out the high of the volatility candle.
For some reason, this post did not upload, but rather than delete it, I would like to update it for two reasons. First, the weekly Camarilla level has held despite yesterday’s pullback on the release before reversing higher once again on a candle with a deep lower wick and very high volume. Second, the volume point of control has moved lower and now sits below the current price (the vpoc is dynamic and will move to reflect the density of volume at a price level). This is significant as the vpoc now becomes strong support. An interesting chart structure as we wait for the release.
