$NQ: Lack of Structure is Achilles Heel of This Rally

$NQ #NQ #trading setup #Elliott Wave

In my previous update on NQ-mini posted on Tuesday I correctly predicted a bullish reversal and a move up. So we got a very strong move up off the Green Target box:

Normally we expect a completed a-b-c move down to be followed by an a-b-c move up.

However, if after a clean a-b-c move down we get a very strong yet structureless rally powered by a short squeeze we may get a monowave move up, a premature attempt to start a new rally, a wave (x) up.

Let’s look at the microstructure of this rally on a 60 min chart shown below:

This move up looks like a straight line, it does not have a starting micro i up, ii down setup. That is a solid sign of a corrective bounce powered by a short squeeze.

Here you can see that NQ is approaching a tight confluence of several levels:

19,856 is a 50% retracement of the July decline,

19,820 a strong support that got broken.

If bulls manage to squeeze NQ a bit higher into 19,850 that would provide bears with an attractive short setup.

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