NASDAQ 100: Did the Bears Fumble?

Three weeks in the past, see ; we discovered, based mostly on our interpretation of the worth motion for the utilizing the Elliott Wave Precept (EWP)

“A drop beneath $15375 will likely be our first sign the purple W-c/iii has topped, and the index is able to embark on as a minimum the purple W-iv? correction to ideally $14400+/-200.”

Final week, see , we then concluded,

“If the index drops beneath yesterday’s low [$14972] with out reaching the $15450-7530 area first, we are going to search for the impulse decrease to increase to the $14600-14800 area earlier than it will possibly strive for one more try to achieve that zone.”

Quick ahead, and the index dropped beneath $14972 final Wednesday, bottomed out Friday at $14557, which was solely 43p (0.3%) beneath the aforementioned area, and is now buying and selling at $15170s. Thus, our evaluation of the final path on a drop beneath $14972 has to date been right.

Nevertheless, the query now’s “Was Friday’s low all of the purple W-iv?, or can we see another drop to finish an impulse decrease?” See the purple field in Determine 1 beneath.

Determine 1. NASDAQ 100 each day decision chart with technical indicators and detailed EWP rely.

To reply that query, we should acknowledge the index has reached completely inside and moved exterior of the perfect (purple) goal zone for purple W-iv?, however has, to date, solely accomplished three (inexperienced) waves decrease from the July excessive. Three waves decrease is corrective. The NDX should stay beneath $15365 (inexperienced W-a/1) as a result of in any other case, the potential W-4?; why can we label the waves as (inexperienced) a/1, b/2, (purple) iv/3 till the market proves one of many two will overlap with W-a/1, and that isn’t allowed in an impulse. We’ll then shift focus to the purple W-V? to ideally $16775+/-25.

Nevertheless, the hourly decision chart (see Determine 2 beneath) has not but introduced us with 5 waves up from Friday’s low. Once we see 5 waves up, the following pullback should keep above $14557, and the index should rally again above the 5 waves-high to inform us $16775s are almost certainly subsequent.

Determine 2. NASDAQ 100 hourly decision chart with technical indicators and detailed EWP rely.

The one caveat we should current is that “after three waves down, count on not less than three waves again up.” What does that imply? The market can current us with a flat correction consisting of three waves down, three waves again up, and 5 waves down (3-3-5). See three waves again up, which might now be underway, can problem or exceed the July excessive, whereas the 5 waves down can goal or exceed the latest lows. However that sample will likely be our alternate EWP rely.