$NQ #NQ-mini #closing week
Yesterday we correctly predicted NQ to plunge:
NQ-mini 30 min chart posted on Thursday, May 23, 2025
This morning NQ plunged as we expected and tagged the Green Box:
NQ-mini 30 min chart
Note that NQ momentarily crossed the key support but swiftly reclaimed that micro support level.
This is what normally happens. The market works as a heat seeking missile. It keeps testing buyers and sellers looking for a party that fails. On the chart above you can see that buyers failed yesterday once price hit the Red Box,
Today bears failed once price tagged the Green Box.
The recent decline in the NQ unfolded in a clear a-b-c corrective structure, culminating in a higher low—a potentially bullish signal. A strong pop up off the green box confirms that there are enough bulls out there who are still convinced that price is about to continue its rally to higher highs.
Zooming out for perspective:
While it’s possible that the bulls are attempting to initiate a new, substantial upward leg, there’s reason to be cautious. The preceding a-b-c correction was relatively shallow, which may indicate that this move was only the initial subwave -a- of a larger (b) wave down.
NQ-mini Daily chart
Because this decline did not hit my downside target I expect a short-term a-b-c rally forming the subwave -b- up within this broader corrective structure, followed by another leg lower as subwave -c- to complete the wave (b). It is very possible that a rally off that micro a-b-c down move fails.
Watch 21,320, a milestone resistance. This is where bulls may fail.
Any corrective decline serves to shake bullish confidence—an essential ingredient for a sustainable rally. As the saying goes, “a fully loaded plane has trouble taking off.” Likewise, when the market is crowded with overly confident buyers, momentum often stalls. It quickly stalls simply because everybody is long already.
For a healthy breakout and continuation higher, the rally needs enough skeptics and bears to remain convinced in bearish reversal and bearish follow through to follow. Their eventual capitulation—chasing price after a breakout—is what can provide the fuel needed for a stronger and more sustainable advance.