Wednesday’s trade was sporadic for the first 2 hours before both the ES and NQ began to move lower with a stronger purpose.  However, in my opinion not with the strength I would like to see to announce a 3 of 3 of 3 move being underway.  Nonetheless the markets did drop with the ES closing down 80 and the NQ 250.

I discuss the possibility that the Minor wave 2 that I labeled as complete may still be in process.  If this is the case consider that yesterday’s highs where I put the Minor wave 2 label being minute wave ‘a’ with today’s action being wave ‘b’ or most of it.  That would suggest that the markets will approve of the CPI and Jobless Claims data due out before the market opens on Thursday.  Should it be the case we would be looking at a minute “c” wave up to carry both the ES and the NQ back towards and likely above yesterday’s highs.  This is just a possibility – since I for one hate to be surprised by a move that I just wasn’t thinking could happen.

If the markets do not receive the data very well I will be expecting a stronger downside reaction and that would be a confirmation of minute, Minor and Intermediate 3rd waves being in process — In the NQ I would be looking for a quick break below 10636 and then again at 10500.  In the ES, a quick break back below 3600 and then again at 3550 to 3500.  Time and numbers will tell all we need to know.