Tuesday’s trade was a 180 degree turn from Monday’s trade with the tech giants leading the way lower. The NQ was off by more than 300 points at several times during the session. I have updated the count of the correction in force now. The degree and number, (wave 2 or 4) is still undecided. I explain why in tonight’s update. For Wednesday, I discuss both the downside potential as well as the upside. What is likely to be expected should either occur and what technically will motivate either direction to press harder and move quicker — the key often lies with the Moving Averages. As I discussed yesterday if the NQ were to break below the 20 MA and then the 50 MA it would create additional acceleration to the downside – that did occur. I also mentioned that a break of the 200 MA would also provide an additional round of downside acceleration and that is what took place. It appears that an additional leg down is still needed before the “C” wave in progress now would be complete — support comes in at 16132, 16007, 15916 and then 15605. Once complete the buyers would be expected to reemerge and begin to push prices higher with a purpose.
January 5, 2022