$NQ #macro #daily #trading setup
There are two macro wave counts I can identify here.
Let’s start from my primary bearish one:
The bearish count argues that this rally is a corrective bounce in subwave (b) up to be followed by a decline in subwave (c) down to a new lower low.
The micro structure of the move up fits much better the bearish count:
The reason why I say that the micro looks bearish is because subwave b down made a lower low under the starting point of subwave a up.
In addition, we can see that the rally stopped righ at the previous support-turned-resistance = 11,534.
We got a really micro rally to the closest micro resistance but that rally burned huge amount of power in terms of market breadth.
NAMO is the McClellan Oscillator is a market breadth indicator that is based on the difference between the number of advancing and declining issues on NASDAQ.
Last time Nasdaq breadth was that overbought when the bear market rally topped in April 2022. We get some strong divergence, a very strong breadth that failed to push the market even to a micro higher high. Needless to say Nasdaq is still under 200 Day Moving average.
That makes me really difficult to justify a bullish alternative:
Its barely possible to make a case that NQ made a lasting bottom.
But its possible to make a case that Dec’22 high was not the top of the whole corrective wave B up but was only a top of its subwave (a) up. Then we are now at the beginning of a rally in subwave (c) up that can stretch to 12,700.
If we get a pullback down to the broken trend line into January OPEX (January 20) shaped as an a-b-c pullback that would be an argument in favor of that bullish scenario.
So far bulls failed even to reclaim the broken-support-turned-resistance at 11,534. And that is an argument in favor of the bearish scenario…