Tuesday’s trade was important in giving strong support to Primary wave C still being the force to be reckoned with. The release of the CPI data premarket gave enough information to release the sell pressure full force. Both the ES and the NQ were down substantially prior to the opening and spent the balance of the session adding to the decline.
I brought view #1 front and center and have dismissed view # 2 from the chart. I added Fibonacci extensions for the Intermediate wave 3 now underway off of the Globex highs. I restate the Fibonacci extensions for the larger Primary C wave back in force now.
I also discuss trading strong directional days with high volatility. As I have discussed normally, when the volatility increases to the downside it provides an equal push to expected bounces. That did not happen today. There were small bounces, but the sellers were too persistent and impatient which basically let us know that yesterday’s buyers were likely today’s sellers. I review what to watch out for premarket tomorrow.