Thursday’s trade was awesome. The NQ opened and immediately pushed to the session high at 14283. I initially felt that finally the NQ would move up to resistance above the 14300 level and complete Minor wave 2. But as they say, ” the best laid plans….” and that for certain was true today. The NQ dropped quickly off the high as the sellers moved in and moved in with purpose. The downside pressure grew stronger as the session moved forward. The NQ broke back below the 200, 50, 20, 8 and 4 MA’s before eventually breaking below support. As I said yesterday, the unfortunate part of the NQ declining was that I would have to wait until a break below 13729 occurred before I could put a top and label on Minor wave 2. Plus, the volatility in the markets over the past couple of days allowed for a larger swing higher or a larger swing lower to occur and for the NQ to remain in the process of tracing out a Minor 2nd wave correction. However, once the break below 13729 happened with follow through, the NQ reached the session low at 13667 just after the closing bell. For tomorrow – it is a weekly expiration cycle and there should be a great deal of movement. Large moves force adjustments across the board in the options. The NQ on the hourly chart is moving into being strongly oversold so I would be expecting as some point a bounce higher. The market may decline to next support before bouncing but we should expect it. With Minor wave 3 now in force – support for the Minor 3rd wave comes in at 13518, 13334, 13199, 13072, and then 12739. Ultimately, I am looking for the NQ to reach support at 11775 before Minor wave 3 completes. Rallies at this point will occur but I’m not expecting anything more than a bounce up to relieve any oversold readings.
April 21, 2022