Wednesday’s trade was a classic “buy the rumor, sell the news” type of day. What I mean by that is back after the December FED meeting during the Chairman’s press conference it was made clear that there would be multiple rounds of tightening/tapering of interest rates during 2022. Then when the FED minutes of the same meeting were released today saying the same thing the NQ dove lower to finish the day over 5oo points lower. In any case, the reality may have sunk in and it hit the tech sector hard over the last two sessions. On an Elliott basis I have made an adjustment to the labeling to clean up the count as the NQ made clear the intentions and what we should expect from here. Over all though, the larger count has not changed. The NQ remains in the process of tracing out the “C” wave of the Intermediate wave 4 correction. Today’s action was primarily the wave 3 of 3 – of “c”. This suggests that after a small 4th wave bounce higher an additional leg down to complete wave “C” is needed and should be expected to drop the NQ below 15492. Additional support below current levels comes in at 15663, 15391, 15311, and then 15092 to 14907. Initial expectations would be for 15391 to 15311 to possibly complete wave “C”.
January 6, 2022