$NQ Gives Us a Different Picture

Unlike the S&P futures (which only has the look of a 3-wave decline—which is why I labelled it as an orange “A” here), the Nasdaq 100 futures lacks that defect, as it made a lower high on 6/28 (green arrow in the chart below), which gives us a full 5-wave decline (instead of only 3).

That should be an impulse wave of some kind, and I have labelled it as green “1” below.

Now, it it is possible that green “2” is an expanded flat, with “2” coming back to revisit the “4” of the prior (blue) degree, which is common:

NQ

If that’s the case, then today’s short covering rally will be followed soon by a precipitous decline.

However, it is also possible that green “2” becomes something larger, like this:

NQ

I think the first count “looks” better, but I can’t rule the second one out. And of course it’s also possible that I’m completely wrong here, in some fundamental way. This is, after all, a seasonally very bullish week. So, let’s see what happens. It’s possible that the rally will fail soon though.


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