The Weekend Update
Let’s start from a primary MACRO Bearish Scenario for NQ-mini:
Under the Macro Bearish count in NQ, that decline off the mid August high is an unfolding five wave down structure.
We can see a good example of a five wave down structure recently replayed by ES in the yellow box.
Specifically, the decline we got on Friday could be a corrective subwave -b- down to be followed by a bounce in subwave -c- of wave (b) up of (iii ) down. Under that Elliott wave count NQ may make a lower low under 10,890 and then came back up to the recent highs 11,640 – 11,700 in subwave -c- up of wave ( b ) up.
That flat -a-b-c- up consolidation would set the stage for a strong drop in subwave (c) of wave ( iii ) down, a very strong accelerated decline targeting 9,000 – 8,900.
Note that flat -a- up, -b- down, -c- up consolidation at the end of April – beginning of May (in a yellow box) , That is a textbook shape of consolidation in subwave (b) up of wave ( iii ) down.
Its important that that -a-b-c- up corrective bounce retraced 50% of the preceding decline in subwave (a) down of wave ( iii ) down.
Note how the market kept testing the March 2022 low (the blue line).
And those numerous attempts to break under the previous major low is what makes up that similarity between the current chart and that flat consolidation at the end of April – beginning of May 2022:
You can note similarity in numerous testing of the previously made major June low.
Again, if NQ repeats the same (quite typical) a-b-c consolidation right over that important support 11,143 then one more bounce off that support in a way similar to what we say in early May 22 would set a bull market trap and set the stage for a strong plunge in subwave (c) of wave ( iii ) down with the first target = 9,750.
The ultimate target for subwave ( c ) of wave ( iii ) down is the Green Target box located at 9,000 – 8,500.
Now lets discuss an alternative MACRO BULLISH SCENARIO:
In a similar way to the bullish count reviewed for ES (see the bullish count for ES-mini futures.
To defend the Bullish scenario ideally bulls should not allow bears to break under the previously made low at 10,890.
Now let’s dive it to a micro count showing the move down on Friday:
In conclusion:
To defend the Bullish scenario ideally bulls should not allow bears to break under the previously made low at 10,890.
If bears manage to break to a new lower low (even a slightly lower low under 10,890 that would be a strong argument in favor of the bearish scenario we discussed first (see above)).
Again, under the bearish micro, a spike under 10,890 may be followed by another deceptive bounce creating a bulls’ trap and setting up the stage for another very strong 10,000 point decline targeting 9,750.