Sunday’s Globex session started with a gap down opening with the NQ continuing to decline. I have updated the chart by labeling Minute waves 1 and 2 which suggests that we are dropping in a minute wave 3 of Minor wave 3 of Intermediate wave 3. In other words things should start to get serious to the downside. The gap lower opening did provide what could be considered the first round of acceleration. I would anticipate that there would be several additional rounds of downside acceleration as the “3 of 3″moves continue. Support for Minor wave 3 remains at 13537, 13273, 13009. Additional support more related to the Intermediate wave 3 sits at 13368 and 13101 – these levels may provide a pause in the decline and possibly a small bounce higher. Overall though the more important support levels are those associated with the Minor wave 3 in progress. The other side of the coin here and the alternate view would be that the markets stop declining with the buyers again swarming in and buying everything in sight. We have seen this previously as large firms declare the markets are extremely oversold. Should it occur again, with the NQ gaining upside traction and pushing back above the 8, 20 , 50 and 200 MA’s it would leave another 3 wave pattern down on the chart and suggest that the NQ is putting in a triple a-b-c pattern to complete the Minor wave 2. This is not a very common pattern, but one that does exist and needs to be reviewed at this juncture. Should the markets rally strongly it would give support to the alternate view.
March 7, 2022