Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

NASDAQ 100: Can It Reach $14400s?

Published 09/18/2023, 03:19 PM

Two weeks ago, see here, we warned it was time to be a bit more cautious for the Bulls based on the interpretation of the price action for the Nasdaq 100 using the Elliott Wave Principle (EWP):

"The index should top out at ideally ~$15750+/-100, then drop back to the low $14Ks again before staging the red W-v rally. It will require a break below the green W-1 high at $15277 to suggest that path, which is our alternate EWP count."

Fast forward, and the index could not even reach $15750+/-100. Instead, it stalled at $15557 and dropped below the critical $15277 level a day later. Thus, as we already stated a month ago:

"based on the EWP, we know that after three waves down, expect at least three waves back up," as the market can present us with a flat correction consisting of three waves down, three back up, and five waves down (3-3-5).

That pattern is the green W-a, -b, -c in Figure 1.

Figure 1. NASDAQ100 daily resolution chart with technical indicators and detailed EWP count.NDX-DailyAlthough it was our alternate option, over the last two weeks it has become our preferred because the index dropped below $15277 and, moreover, the decline from the September 1 high to the September 7 low counts best as five (orange) waves lower (grey W-i), while the subsequent rally into last week's high was, again, only three (orange) waves (grey W-ii). See Figure 2 below. As you can see, a lot can happen in two weeks, and it pays to stay informed frequently.

Figure 2. NASDAQ100 hourly resolution chart with technical indicators and detailed EWP count.NDX-HourlyOur preferred path is now for the completion of the red W-iv as an expanded flat, with green W-c underway. As stated, C-waves in a flat comprise five waves. Thus, grey W-iii, iv, and v of W-c of W-iv should commence soon. See Figure 2 above.

Please note that we are all always students of the market, and our preferred assessment will be wrong on a break above $15600, with a first warning for the Bears above last week's high of $15512. We will then have to switch to a Bullish Ending Diagonal (ED) targeting $16750s. EDs comprise five sets of three waves (3-3-3-3-3), and thus, while the initial part still looks corrective due to three waves up and down, it is a tricky way to get wrong-footed ultimately. But it is simply our insurance policy if things go wrong. Lastly, we are tracking two other (Bearish) possibilities, but given the length limitations of these articles, we cannot share them at this stage.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.