NDX Could Still See Lower Low Prior to Breakout

Nasdaq futures overnight continued to move higher, making it more likely that we did indeed bottom in a corrective ABC move down off of the high. As I noted yesterday, this does not rule out that we still will see lower levels as part of a larger corrective move, as a 5-wave move down off the highs was not required for the topping count that I have been watching.

So while moving lower in a larger-degree corrective pattern will make this a bit more difficult to track, my base case at this point in time is still that we will see a lower low under yesterday's low prior to breaking back up over the 8641 high on the NDX.

I will, however, have to be more reliant on larger degree price support/pivot levels to the downside to help give additional guidance as the initial impulsive structure does appear to be breaking down. Upper micro resistance for the wave ((b)) currently comes in at the 8315-8429 zone, and as long as we are trading under that zone my base case is that we will indeed still see lower levels prior to breaking out higher again.

Should those levels be breached then it would make it more likely that we may have bottomed in the blue alternate wave (4) as shown on the NQ and 1 Hour NDX chart. I have left the door open to this still topping in a wave iv down off of the highs needing yet another low to finish off wave v down. This path works better with the cash charts but does not work as well with the futures chart nor does it work as well with the VXX. That said, I will allow for it as an alternate path if this can manage to turn down fairly quickly and get back under yesterday's low.

Bigger picture very little has changed and the analysis remains unchanged from the previous updates. See our previous posts and the attached charts for more.