Yesterday, we posted two possibilities – green or pink:
The pink count won out – — so how did the C-wave down subdivide? Well, that’s shown in blue/green below:
The overnight drop happened at 4am. At 8pm a resistance point was set at 2060 (b-wave high) — there was a retest of it that failed (green wave 2) — and then from there it went straight to 2041.
It’s interesting to note that both May 3 and May 4 drops — happened at 2am and 4am, respectively. The bulk of the drop happened overnight so during the day it would not have been easy to catch that wave.
During the day, we developed a 4-5 mountain – that looks fairly symmetrical from the left and right side. Ultimately the support broke — but only by 2 points – and then it retraced back into the close.
On the daily chart – we can see the 2041 support that is in between the ranges of wave 1 and wave 2 of the prior rally. We can also visually see 5-waves from the top at 2100 down to 2040.
It was possible for a wave 3 to develop today down — and break the 2040 support — which is what many people were trading for on the short side. But I think in the past couple of days we got enough high 4th waves that they might clue us in that the 3rd wave down won’t happen. After 2040 support would be 2032/2035 support.
Still, the Nasdaq has not crossed its trend line and continues to make new lows. On the daily chart, 4300 is supposed to be support. It looks like the 5th pink wave v — subdivided into what I have labeled in blue as a-b-1-2-3-4-5.