Wednesday’s trade did provide some confirmation that indeed the NQ is putting in a triangle pattern to complete Minor wave 4. The release of the CPI was amazing in that the absolute initial reaction from somebody somewhere was so reminiscent of trading on the floor and having one of your clerks nudge you and say – I accidentally bought 500 NQ instead of selling 500. That would be one way of explaining what took place on the opening today, but it wasn’t just the NQ — all the indexes jumped higher on the release of the CPI data. The rejection was also absolute and very swift, with the NQ dropping from the high at 11970 to the low at 11479 in 30 minutes. Both levels ended up containing the balance of today’s trade.
In the end the NQ remains in the process of tracing out the Minor wave 4 triangle with waves A thru D are complete needing a finishing E wave pop higher before the triangle completes as well as the Minor 4 completing. This would then be expected to usher in the Minor 5th wave decline to finish up the Intermediate wave C and in turn the Primary wave A.
For tomorrow, PPI and Jobless Claims before the open. Wave E has Fibonacci resistance at 11931 to 11995 which may contain wave E. Additional strength and momentum could push back above 12200 with stronger resistance at 12212. Trade IMHO will be more difficult as wave E unfolds in its own a-b-c structure. I would be looking for quick rallies and declines running back-to-back. Support and resistance levels are included with the update.