So the market puked after the Fed raised interest rates yesterday.
The drop in Nasdaq and Russell were particularly strong.
That said, I think there will be an opportunity to pick them up for cheaper soon.
Going into the Fed meeting – the market rallied overnight – but hit that resistance point at 2443 ES as well as resistance on the Nasdaq – from there it sold off – and after the Fed meeting – it failed again and dropped.
Despite rallying quickly into the close, it turns out the market puked overnight.
Whenever the Fed makes an important decision such as raising interest rates -I’ve noticed it’s not necessary the announcement itself that has the biggest move – but rather the overnight session afterwards into the next day. Looks like this
We have now formed a potential large zig zag pattern from 2443 ES down to 2415 ES back up to 2443 ES back down to 2415 ES. If market can break resistance, then move can be strong.
The previous chart was correct – except what happened was the size of wave 3 was much smaller than the size of wave 1 going into the Fed meeting. So it turned into a fakeout – despite touching the highs at the point at the top of the 5th wave at the open the next day at 2444 ES.
We had a big A-B mountain pattern in the Russell at the market open – with a big fakeout spike. However, given the rally after the close, and positioning in the wave account with the A-B mountain occuring at 1400 TF support, the Russell is positioned for a potential 5th wave up.
The dow has been the strongest index – nearing new highs.
The Nasdaq was hammered. I thought the bottomw as in on Monday – but no, after Fed interest rate hike – market went down in the after hours and spent more time in the lower levels than it previous did.
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