Tuesday’s trade saw the buyers step it up during the Globex session with the NQ getting the bulk of the buying activity that initially carried the index back above 12000 to a high at 12025 on the opening. Once done though the sellers took over and in the next 15 minutes dropped the NQ 200 points to the morning low at 11802. All the movement though did allow additional insight to what is likely playing out in the NQ.
I have labeled the 12211 high as the completion point for wave C of Minor 4. But before I jump to the conclusion that Minor wave 4 is complete and we are dropping in the Minor 5 wave, I need to consider the possibility that Minor wave 4 is forming an a-b-c-d-e triangle pattern. If this is the case, we need to allow for a D wave to drop down to support at 11678’ish before again turning higher forming a 3-wave pattern to put in wave E and complete the triangle and the Minor wave 4. The resolution of triangle patterns under Elliott is that once complete they will “thrust” out of the triangle going the length of the triangle as the expected Minor 5 wave takes over.
If though, the markets decide to “puke” after the CPI number, the NQ would/could pick up the pace to the downside breaking below 11600 without any real problems and drop fairly quickly down to 11348. Ultimately, if Minor wave 5 is in force the 11068 low should be surrendered as the NQ heads toward support at 10678.