$NQ #NQ-mini #trading futures #macro update #Elliott Wave
We can consider that bullish path our primary scenario. The bullish scenario is based on assumption that NQ made a major bottom of a corrective wave in Oct 2022.
If we assume that NQ made a major bottom of a corrective wave in Oct 2022 we can consider the rally off that low as an unfolding five wave up rally.
The Oct 2022 low could be a wave 4 down that hshoudl be followed by the final wave 5 up structureed as an A up, B down, C up structure. In that case this rally is a subwave A of wave 5 up that is supposed to extend higher to re-test the Nov’2021 highs.
We can perfecty count the rally off the Oct 2021 low as a five wave up rally that has not topped yet. The July 2023 top can be perfectly counted as the top of a micro wave ( iii ) up and this declien as an orderly wave ( iv ) down.
This is a possible current location on the map showing a completed five wave up fractal:
Let’s zoom in to a 120 min chart of NQ-mini futures to see a micro structure of the decline off the July 2023 high:
We can count enough micro waves that together form a completed Double Three structure where the second leg down in a wave (y) down has just tagged the very minimum required extension at 76.4% ext of wave ( w ) down.
However, ideally that decline could have stretched lower to the next cluster of targets at 14,900 formed by:
- the low made by the previous corrective wave -iv- down ( a corrective pullback of one degree lower) made at 14,853 on June 26, 2023, and
- a 30% retracement of the five wave up move in a subwave (c) of wave ( iii ) up, and
- a 100% extension of teh wave ( w ) down.
Therefore, ideally bears push NQ down to the upper edge of the Green Target box would be a great long setup. But, again, if we count micro waves we can make a case that NQ made a bottom. So bulls have a setup to start a new push higher in a subwave (a) of wave ( v ) up targeting to retest the high made in July 2023.
Interestingly, the low made at 15,037 on Friday tagged the 100% ext of the subwave (a) of wave (y) down.
Note how many times that same level stopped bears in June and then in July:
Now look at an important level of resistance 15,480, the top of a micro wave ( iii ) up made in June 2023:
Most likely bulls will not be able to break over that red horizontal like from the first attempt. And to confirm completion of the wave (iv) down we need bulls to push NQ first out of that declining red channel and then to break over that red line at 15,480 and invalidate a potential bearish Head and Shoulders setup. Bears would most likely recognize the bearish Head and Shoulders setup if bulls manage to push NQ up to the Red Line and would be fighting hard to defend it.
So ideal scenario would be to get a bullish a-b-c up bounce to the red line either from the Friday low or another lower low made at the Green Box. The bounce up to the Red Line would be the moment of truth.
If upon completion of a bullish bounce to the red line bears manage to push NQ back down to where it stands now and break under that green line (15,040) that would be a strong argument in favor of invalidation of that perfect bullish scenario and a strong move down.
Alternatively, if we get an a-b-c move up to the Red line and then we get a small corrective a-b-c pullback making a higher low that would be a bullish i up, ii down setup, a solid foundation for a breakout over the red trend line and confirmation of that bullish scenario with the next target at the highs made in July 2023.