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Watch and Wait

I sold the NQ futures I bought Friday closing time today at 1:03 pm.  

There is now a high probability we consolidate here at the top of the daily chart.

This was the Expanding Flat scenario on 120min chart that failed to materialize in a sustained rally:


The i-ii-iii wavecount after the a-b-c was  a failed i-ii-iii with an extended iii-rd wave.  When it happens, more likely that failed rally will become an X-wave (failed extended 1-2-3 or i-ii-iii = becomes an X-wave most of the time):


I was expecting a Zigzag down would follow the X-wave;  but SnP was able to break above 1200.55 today and that eliminated the Zigzag down scenario (1 down 2 more to go).

Next expectation is either a Flat or Triangle will form.

Either a Complex Flat or a Triangle (or even a Complex Combination) has the highest probability to form - since the next market moving news will be on Friday for the Jobs Report.

Too much price gyrations had happened last week traders are still shell-shocked.  They need to understand what is happening before making another move.  Expect trading volume to keep going down till Friday.


-  An X-wave is necessary to prolong a correction into a consolidation range (to connect one pattern to another.  In this case; possibly to connect the Expanding Flat with a Zigzag, another Flat, a Triangle, or a Complex Combination).

-  Once a potential X-wave formed on the charts;  the best course of action is either watch and wait or scalp the intraday gyrations for those proficient enought with scalping techniques.