NQ-mini - A-B-C of the low hit 100% extension

A week passed since my last post about NQ but the picture has not changed. We are dealing here with a topping A-B-C structure off the December low. Today wave C stretched to 100% extension of the wave A. What is important is that NQ still holds well below its critical resistance at 6,900.

My primary scenario is that this A-B-C is a corrective structure of the wave 4 up that should be followed by another decline in wave 5 down.

The second scenario is also bearish. Under that scenario, a drop off September high into December low was the first leg down in wave (A) of (4). And this A-B-C rally off December low is the first leg up of a corrective wave ( B ) up. Under that scenario we still should get a meaningful pullback retracing from 50 to 61.8% of that rally targeting 6,276 – 6,170 area.

Finally, there is another less likely bullish scenario that December 2018 low was a major low of the whole correction in wave ( 4 ) down. Then this rally off December low is a wave 1 up.

Under any of those scenarios this current wave C up may extend to 114.4% – 123.6% extension targeting the area between 6,800 – 6,860. That area is located under the critical resistance. That final thrust higher can give bulls another 2-3% gain from today’s close. And then we still should get a meaningful pullback down targeting 6,276 – 6,170 area.

I would like to give one advice to bears who have been trying to nail a top of that rally. Your high probability shorting setup will come with an exhaustion gap up into the topping area I outlined above. 

NQ-mini - 45 min chart updated on 16 January 2019