Breaking News
Get 40% Off 0
👀 Reveal Warren Buffett's stock picks that are beating the S&P 500 by +174.3% Get 40% Off

Local Top for the NASDAQ 100 Forming?

By Dr. Arnout ter Schure Stock MarketsNov 27, 2023 02:46PM ET
www.investing.com/analysis/local-top-for-the-nasdaq-100-forming-200643915
Local Top for the NASDAQ 100 Forming?
By Dr. Arnout ter Schure   |  Nov 27, 2023 02:46PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
NDX
-0.54%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

We hope everyone has had a wonderful, shortened Thanksgiving Week with family and friends last week. As such, our usual update every two weeks is a week later than normal, and a lot has happened since our last update on November 7 Namely, back then, we were looking for the Nasdaq 100 to

“…top out soon, ideally around $15500+/-100, before a multi-day correction (green W-2) down to ideally $14600+/-100 kicks inOnce green W-2 completes, green W-3 to ideally $16450+/-100 will ensue.”

The index peaked at $15382 two days later. It then dropped that same day to only $15171. A meager 1.4% intra-day correction. It is still the largest since the October 26 low, which does not give us much to work with. Now, the NDX has rallied to as high as $16119.

Hence, our forecast for a local top, drop, and rally was correct, albeit the drop was much smaller and shorter than anticipated. It happens; we cannot foresee everything, and since the market doesn't owe us anything, we must acknowledge that no system, pundit, or analyst can be 100% accurate. If anyone is under the impression that one must always be right to succeed in the markets, let me disabuse them of that notion. Market analysis is not an exact science. If one approaches the markets as if it is, one's portfolio will be in big trouble.

Figure 1. NASDAQ100 daily resolution chart with technical indicators and detailed EWP count.

NDX-Daily Chart
NDX-Daily Chart

That said, from the green W-2 low made on November 9, the index has completed five (grey) waves up, following a standard Fibonacci-based impulse pattern rather well. See Figure 1 above. W-iii, iv, and -v all reached the ideal target zones. Hence, the green W-3 can be considered complete at last Wednesday's high. There are enough scribbles at today's low to suggest that the green W-4 is done, but we must see a daily close above $16120 to be more confident that is the case. Then we will look for $16315-620 for the green W-5 of the red W-v of the black W-c/3.

However, Figure 2 below shows that the green W-4 can become more complex. Today's low and rally could have been grey W-a, -b, respectively, and grey W-c to ideally $15750 is about to commence. It requires a break below today's low to confirm this scenario.

Figure 2. NASDAQ100 hourly resolution chart with technical indicators and detailed EWP count.

NDX-Hourly Chart
NDX-Hourly Chart

Note there are a lot of negative divergences (red and orange arrows on the daily and hourly chart, respectively), suggesting the uptrend is losing momentum and strength, supporting the case for a pullback, but those are conditions, not triggers. Price is the final arbiter and trade-trigger. Thus, the Bulls would want to hold $15738 or risk facing closure of the November 14 gap open at $15535. Moreover, a drop from current levels below the November 9 high at $15382 will tell us a much more significant pullback to ideally $14500+/-100 is most likely underway before we can see another substantial rally. Lastly, a lot can and will happen between our updates. It, therefore, pays to stay informed more regularly than, at best, every other week.

Local Top for the NASDAQ 100 Forming?
 

Related Articles

Local Top for the NASDAQ 100 Forming?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (5)
Habiba Asif
Habiba Asif Dec 20, 2023 9:11PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
1156
Joeri Willems
Jurinho Nov 29, 2023 9:17AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Precise, maybe, but i see, without looking at the technicals, a clear path here too. For me the message from brokers and institutions is 'let's kick ass for another great Christmas Run, because in January.. we'll face big shit'. I think the uptrend will continue for certainly a few more weeks - it was astounishing how really everything got bought recently, there was almost no down part in the graphs, not even by the minute.. Which would explain a mutual agreement by all money makers to keep it up and go for a top before the next dip. I'd  hold, but sell off end of December and turn the position around. Taiwan elections will kill the party mood.
murray cooper
murray cooper Nov 28, 2023 9:10AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Hi Dr,  NDX showing a gap at 15540 so I would expect that to fill on next retracement, before uptrend resumes. Support at 15,900 (future consolidation resistance) and 15,260 (pull back buy zone) (15,180 Stop!) ... these will be my short-term trading ranges ... larger range boundary down at 14,575 ...plenty of quick profits in these ranges. Thank you, sir, for your updates!
Barliin Barliin
Barliin Barliin Nov 28, 2023 2:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thomas Varghese
Thomas Varghese Nov 27, 2023 10:15PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Its really good article , and a very precice to the point
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email