Guideine For Thursday

On Wednesday the downtrend on the daily chart continued. Vix spiked to multi-year high.

On Wednesday, NQ opened with a huge gap-down then rallied up towards resistance, but was quickly sold-off, NQ tanked hard dropping almost 100 points down to strong support before rallying back up over 100 points to resistance before dropping back down into the close, setting up a doji day on the daily chart.

We can now see that the second downleg has extended over 1.618 of the first downleg, qualifying it as wave 3 down. If so, and if wave 3 down has found support at prior swing high, we should see several days of rally before the next downleg, wave 5 resumes. However, if wave 3 is still in progress, NQ should continue to tank on Thursday.

Key price level for Thursday is 3690.

-- Above 3690 implies NQ has found some temporary support to launch wave 4 retracement. with strong resistance at 3800.Typical target for wave 4 retracement are .382 and .50. The 382 retracement is 3830 and .50 retracement level is 3867.

-- Trading below 3690 implies wave 3 is still in progress and look for more forced margin call liquidation decline.