$NQ #NQ-mini #trading setup
Yesterday I shared a short setup that played out well. NQ-mini dropped 150 points overnight.
Let’s review the wave count of the decline. I will attempt to re-count it as a combination of three wave moves.
We can count the whole decline as a -w-x-y- down structire that is about to bottom:
The first par t of the decline, the -a-b-c- move down off the July top is labelled as -w- down:
So after bears produced the first a-b-c move down bears got a chance to start a new rally. That is the main principle of the Elliott Wave theory.
They attempted to start a rally (see black segment) but quickly got exhausted. When upon completion of a corrective a-b-c down structure bulls attempt to start a rally but fail we count the first a-b-c move down as a wave -w- down and the failed rally as a wave -x- up. Then we would expect bears to produce another a-b-c move down off the high made by the wave -x- up:
Note that NQ reached the support (i) = 15,060. That is a 76.4% ext of wave -w- down AND a 100% ext of the subwave a of wave -y- down.
So its possible that this pre-market drop completes the whole corrective -w-x-y- structure. Ideally, though, I would prefer that decline to extend lower to hit the support (i) that has been our main target for the whole drop for weeks, that is 14,900.
For NQ the Daily support is 15,146. Hence it got broken it now works as the critical resistance for the day.