The ENQ continues to trade in a Balance Area that has been forming since the first trading day of the year. This is the most well-defined and one of the longest Balance areas in terms of duration that we have seen since at least the March 2009 low. It is inevitable that this structure will break (transition into Vertical Development), and it is highly probable that break will be a sharp trend that has the potential to put in place the next intermediate term direction not only for the Nasdaq 100 / Enq, but also for the other three primary trading indices – the S&P / ES, Dow / YM and Russell 2000 / TF.
As this is being written the ENQ is approaching the HVN (High Volume Node) of the structure. In a mature balance Area the HVN acts similarly as the Balance Area extremes and price is likely to move sharply away from the HVN toward and through the upper, or lower extreme.
Because of the recent rejection of the upper extreme, and the present conviction to the downside, I’m favoring a downside resolution. I’m wrong about the direction of the break if the ENQ now trades above 2757.
