NQ: Broke Under Important Support

  • CastAwayTrader
  • February 10, 2023
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$NQ #macro #breakdown #trading setup

In my previous update I repeated several times that bulls would remain in control until bears manage to violate an important support 12,455:

NQ 240 min chart

Because that support was violated I think we can conclude that the large corrective wave B up completed and a new leg down in a wave C has started. Therefore I think NQ-mini is working on the first a-b-c move down that can get completed at 12,258 or slightly below it (see the Green Box).

Upon completion of that a-b-c move down we should expect a corrective a-b-c up consolidation making a lower high.

Now I want to share with you one important thing I realized after watching the stock market for 25 years.

It is always important to consider what the other party sees or hopes for.

This is what bulls pray for here:

NQ 240 min chart

Bulls consider this large a-b-c down as a corrective wave iv down.

Note that this decline is approaching the top of wave i up.

There is always a strong demand zone right under the top of a micro wave i up.

It does not matter whether that wave count is right or wrong. It does not matter whether price will make all the way up to the Red Box. It matters that the count is valid and millions of traders see it. Therefore we can reasonably expect that people would bet money on that bullish scenario.

That means that as soon as price hits the green zone balance of demand and supply in NQ will shift in favor of bulls. I think that a-b-c down structure is a way too large for a micro wave iv down. And I think that bulls will fail at that red trend line or slightly above it.

But more important is that bulls will most likely will get attracted by that cheesy scenario of one more push higher in a wave v up.

NQ-240 min chart

I would expect bulls to test that Red Box and re-test the broken support of that green wedge FROM BELOW either by Tuesday when CPI will be released or after that release. If bulls fail to push NQ through that Red Box we will most likely get continuation of this move down to new lower lows.

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