I showed this morning in a blog post how technically the SPX had met the required price structure rules to say that the move up into resistance was possibly complete. The NASDQ 100 is less clear …
NASDQ 100 Futures Contract (NQ) – 240 Minute Chart #1
You can see from the above chart that we have made a 2-legged move higher off of last week’s low. However, we did not make it into the 1.272x – 1.618x extension target (min target of 6443.25) and we did not make it all the way into the SLOT (50% at 6479.75).
Not making these targets is not an absolute … often when a wave structure fails to complete to the normal levels, you can say it “broke” the normal pattern and that the power/emotion of selling/buying did not allow it to complete.
You do however, need to be aware that the pattern is more complicated than a single ABC corrective wave. That ABC may be just the A-leg of a bigger bounce into the SLOT yet to come. Let me show you …
NASDQ 100 Futures Contract (NQ) – 240 Minute Chart #2
So there is no guarantee that we are heading down to Wave 2 support right now … we could be setting up a bigger bounce into resistance.
The 61.8% level at 6045.5 needs to hold … the longer we stay above that level, the greater the chance that the bounce higher is not complete.
Going against that type of price structure is the fact that the SPX has completed a two-legged bounce into the SLOT … maybe the SPX will just chop around giving the NASDQ enough time to set up the move back down into Wave-2 support.
If the NASDQ does in fact fail to go lower from here and begins to bounce, I suspect lots of people will say that is a show of strength …. they obviously don’t pay attention to wave structure!!
Cheers … Leaf_West