Tuesday’s trade saw some strong reversals within the NQ and the ES. After reaching session highs on the opening, both the NQ and ES spent the balance of the session moving lower with more strength than we have seen in a couple of weeks. The ES broke below what is called the VOL Wall – which is a price point where portfolio managers change their hedging strategies usually by selling into weakness and buying into strength. The NQ broke below Fibonacci support at 12905 and then 12837 which brought with it adjustments to the existing EW counts and also Fibonacci support and resistance levels — then the closing bell rang and MSFT and GOOGL reported 1st quarter earnings. The pent up energy popped to the upside after both companies reported solid 1st quarter earnings. The moves themselves brought the NQ back above 12900 and the ES back above 4100. I have reviewed my counts together with Dan Ascani, as we attempted to factor in what is taking place in the Dow Jones Transportation index. Again, then MSFT and GOOGL earnings were reported.
I have made some changes to the larger picture EW count – not necessarily changes the direction of the correction but more in line with near term expectations pre and post earnings reports. I update the labeling within the current countertrend rallies, which again does not change the overall count or outcome. At this juncture I am still leaving open the potential for a final run higher to complete the Primary B wave counter trend rallies. I adjust and restate Fibonacci levels for both the NQ and ES.
Tomorrow, Durable Goods, and International Trade in Goods data will be released at 8:30 AM – After the close META reports 1st quarter earnings.