QQQ and SPY Price Levels [MW]

1 сент.

Introduction:

Don’t let SPY and QQQ resistance levels hurt your futures trading anymore. The QQQ and SPY Price Levels [MW] indicator automagically provides easily accessible QQQ price levels for NASDAQ-related charts such as QQQ, /NQ and /MNQ futures, and leveraged ETFs such as TQQQ and SQQQ as well as for SPY price levels for S&P 500-related charts such as SPY, /ES and /MES futures, SPX, and leveraged ETFs such as UPRO and SPXU. If you’ve ever traded futures, or anything QQQ- or SPY-related and wanted to know at what price would the corresponding asset reach a key whole number level of QQQ or SPY, like 400, 440, 445, or even 447.50, this tool is for you. Key 10x, 5x, and even 2.5x multiples of QQQ and SPY can act as support or resistance for other related-assets. Until now, there hasn’t been an indicator that can serve as an easy visual cue to know exactly when that is about to happen across assets.

This indicator is a fork of the original SPY Price Levels [MW] indicator, which only considered SPY-related assets.

Settings:

• QQQ/SPY 2.5x: Show closest levels above and below that are multiples of 2.5 on QQQ
  
• QQQ/SPY 5x: Show closest levels above and below that are multiples of 5 on QQQ
  
• QQQ/SPY 10x: Show closest levels above and below that are multiples of 10 on QQQ
  
• Show QQQ/SPY Price Label: Show the current QQQ/SPY price
  
• Extend lines to the left: Extend label lines for each price level to the beginning of the chart
  

Calculations:

This indicator defines the ratio between the price of QQQ/SPY and another NASDAQ/S&P-related asset and uses that multiplier once the user-defined price increments are defined. For example, if /MNQ is at 19000 and QQQ is at 465, then the ratio would be 40.8.

The incremental QQQ levels that are above and below the QQQ price are calculated using the following equations:

Pine Script®

The conversion ratio is then multiplied by that amount to get the final estimated corresponding price using the calculation:

Pine Script®

For leveraged assets, the conversion must be used on the difference between the current QQQ price and the incremental upper and lower levels.

For example, the calculation for the next level up looks like the following:

Pine Script®

This logic is identical for SPY-related assets.


How to Use:

The QQQ and SPY Price Levels [MW] indicator aims to be as unobtrusive as possible. The default view shows 3 labels and 2 lines that are all aligned to the right of the main chart, so that it interferes as little as possible with any other indicators. It can be added to any /NQ or /MNQ futures chart, SQQQ, TQQQ, and, of course, QQQ as well as any /ES /MES futures chart, SPXU, UPRO, SPX, and of course SPY. The most immediate price levels for each multiplier appears above and below the current price along with the price of QQQ/SPY.

For example, MNQU2024 is currently at 19594. By looking at the indicator the next QQQ increment below is at 475, or 19556 on the MNQU2024 chart. This potential support is marked with a green label that shows both prices. The next increment above is at QQQ 477.50, or 19659 on the MESU2024 chart. And the QQQ price itself, is also shown (and can be removed) at 475.92.

QQQ and SPY price increments of 2.5, 5, and 10 tend to consistently act at the very least as emotional support and resistance levels. Weak, or weakening volume and/or momentum when these levels are hit can trigger a strong rejection, and can sometimes precipitate lengthy consolidation periods at those levels. Watching an NASDAQ- and S&P 500-related asset come to a halt, fall off a cliff, or react in some other unintuitive way could very well be the result of a QQQ/SPY level being reached. Even though many of us know that this relationship exists, it’s easy to forget. So, this indicator helps to ensure that its users keep that relationship front and center.

By extending the lines into the past on QQQ/SPY and their related assets, you can see what reactions happened at these key levels.


Other Usage Notes and Limitations:

The calculations used only provide an estimated relationship or a close approximation, and are not exact.

It's important for traders to be aware of the limitations of any indicator and to use them as part of a broader, well-rounded trading strategy that includes risk management, fundamental analysis, and other tools that can help with reducing false signals, determining trend direction, and providing additional confirmation for a trade decision. Diversifying strategies and not relying solely on one type of indicator or analysis can help mitigate some of these risks.