NQ Flow Report
Understanding Support, Resistance, and Market Behavior
Market Concept Overview
Before diving into strategy or trade types, it’s important to recognize that every futures session is shaped by how price interacts with support and resistance. These are the natural boundaries that define where buying or selling interest emerges. When price holds above a support level, it signals accumulation and confidence among buyers. When price stalls or turns from resistance, it reveals exhaustion or hesitation among participants. Recognizing these turning points forms the foundation of interpreting any session’s directional bias.
Key Levels & Reactions
Support and resistance (often abbreviated as S/R) are the structural landmarks of the market.
Support represents areas where buying activity consistently appears, preventing deeper declines.
Resistance represents zones where selling interest builds, limiting upward progress.
These levels are not precise numbers but zones of interest — often around prior highs, lows, or round-number levels where large participants have acted before. Observing how price reacts at these areas — whether it stalls, rejects, or breaks through — provides insight into the strength or weakness of market sentiment.
For example, if the Nasdaq holds above a morning support area and begins building higher lows, that behavior often reflects an underlying shift from defense to offense by buyers.
Volatility & Timing
Volatility and timing determine how meaningful an S/R reaction becomes. Early in the session, levels often test with greater energy — driven by overnight positioning and new participation from the open. Later in the day, reactions tend to slow and consolidate as volume thins.
Continuation and reversal patterns are often born from these shifts in tempo:
A continuation move follows through after a clean break and hold beyond resistance or support, confirming that one side maintains control.
A reversal develops when price rejects a level decisively and returns back through the prior range, indicating a failed attempt and changing sentiment.
Understanding when volatility contracts or expands around these moments helps traders interpret whether momentum is likely to persist or fade.
Takeaway of the Day
Support and resistance are the market’s language of balance and imbalance. Continuation and reversal behavior simply describe how that balance changes in real time. When buyers defend support repeatedly, continuation higher becomes more probable; when sellers absorb every rally near resistance, a reversal is more likely.
By viewing each session through this lens — structure first, direction second — traders can better read the rhythm of the Nasdaq without relying on any proprietary tools or indicators.
