After rallying for 5-waves up on Wednesday, Nasdaq spent all day consolidating on Thursday. Consolidation is a pause in the market, once it ends it either resume the prior trend or reverse. Key level in for Friday is 2750 area.
On Thursday it looks like NQ has started the first reversal leg down (wave 1 or A) into the close. If so, look for wave 2 or B pullback up to around 2750 area, and wave 2 or B should not break above Thursday's swing high. If NQ is truly reversing down look for wave 3 or C down after a brief pullback up to 2750 area, with wave 3 target down at 2700-2715.
If the above analysis is valid, keep in mind that wave 3 tends to be a gap-open and then trend in the direction of the gap (in this case it will be a gap-down open and trend down)
If the above analysis is valid, keep in mind that wave 3 tends to be a gap-open and then trend in the direction of the gap (in this case it will be a gap-down open and trend down)
However, a clear and sustained break above 2750 area implies the above analysis is not valid. If so look for NQ to rally up to 2765 - 2780 resistance zone on short-covering
Below is NQ 5-minute chart showing its potential path for Friday
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