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NASDAQ 100: Is Correction Over? Or Is There More To Come?

Published 10/22/2021, 03:32 PM
Updated 07/09/2023, 06:31 AM

Three weeks ago, see here, I was looking for the NASDAQ 100 to bottom soon, ideally around $14700-14850. Because "three waves down appear to be (close to) complete" and I showed "a bounce … should be expected soon before minute-c completes (green) minor wave-4 later in October at around current price levels."

The bounce was projected to reach $15000-15500 (See Figure 2 in that article).

Fast forward, and the NDX bottomed a few days later than expected, as the final 4th and 5th waves wrapped up, but right around the ideal target zone (see Figure 1 below). Besides, please see my tweets here explaining the slightly deeper-than-initially-expected decline in minute detail. Since it is near impossible to foresee every (slight) twist and turn, the index is now right where I anticipated it would be three weeks ago. Indeed, the Elliott Wave Principle (EWP) is, in my opinion, best suited for forecasting the intermediate to longer term.

Figure 1 NDX100 hourly candlestick chart with EWP count and technical indicators.

NASDAQ 100 Hourly Chart.

Thus, there are three waves down (red A, B, C, made up of a 3-3-5 internal pattern) since the early September all-time high at the early October low.

As always, "after three waves down, expect at least three waves back up." And here we are, there are now and so far three waves up: (red A, B, C, made up of a 3-3-5 pattern as well). Besides, the C-wave reached the ideal target zone and tagged the 138.20% extension of wave-A, measured from the wave-B low.

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Lastly, if this is still the preferred flat correction, the index rallied high enough as the bounce needs to be at least 90% of the prior (A-wave) decline. Thus, it now is "do or die time" for my "flat thesis." What does it take to confirm: A break below the A-wave high at around $15,000. The bulls' first warning will be on a break below $15,115 from current levels as that would signal a possible 4th wave lower is off the table.

"Fourth wave?" I hear you ask. Yes, the index could already have completed its correction and is now tracing out either a common impulse higher or a diagonal. See Figure 2 below.

Figure 2 NDX100 hourly candlestick chart with EWP count and technical indicators.

NASDAQ 100 Hourly Chart.

Indeed, although my preferred option is for a more significant, longer-drawn flat correction, I must also be mindful of the fact that a correction is always at least three waves down, and the index just experienced it. For now, the upside target zone laid out three weeks ago has been reached to the T, as was my downside target zone. Thus, I consider my recent assessment and forecast as complete and successful, and I will now let the market decide which path it wants to take.

As things are becoming a little less confident, and trading is all about risk management, I, therefore, suggested to my premium major market members over the last few days to raise stops and/or lock in profits. The easy money to the upside has now been made. May I suggest you do the same?

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Latest comments

Wow, you were way off Dr.  I feel sorry for the clients that you told to sell weeks ago - they lost a lot of profits!
Yes you are right i lost 30K $
Dr. you've previously stated that you expect a multi month wave 4 down to below 15000; my question is doesn't the market take 'the elevator down' and a correction like that would e quick? thanx!
Your analysis were completely wrong ; you were expected 3 waves down and end up with 3 waves up and maybe will continue up!!!
Hi Doc, what is the next target for nasdaq 100 for next week? Still going up?
Hi Doc, The third wave up, do u think that is was happened today?
I have lost track of the bigger picture. Now in a 5 of the bigger 3, then a bigger 4 followed by the last bigger 5? Where will it end and what gapens then? Thanks!
Dr., An analysis piece on TSLA would be much appreciated.. esp after this juicy run up.
Nasdaq was overvalued at 9,000 just prior to covid and now at 15,000. It NEVER went through a proper correction, more a few dips which were 'technical' corrections in the past 18 months. So much money is floating around that buyers are constantly buying the dip with 0 risk as Fed is pumping money in so quickly with any falls only lasting a few days.  If the Nasdaq 100 had grown organically over the past 2 years you'd have it at 11,000 based on its long-term trajectory (Even the Dow should be at 32,000 and not 35,700). A lot of the bubble is due to FED Money / Low-Interest Rates. Most PE Ratios are at historic highs and a lot of companies will struggle to maintain profit levels with high inflation / Higher Salary Demands / Employee shortages / less Fed money being thrown around + potentially higher taxes.  Plus Dems still need to find a way to pay down the massive $30 Trillion in US Debt (maybe $32 Trillion by Q2 2022 - it was only $5 Trillion of Debt in 2000 when GDP was $10 Trillion)
I am expecting to see around 14200 as christmas is coming and most probably lockdown during the christmas. We will see what will happen.
some bullish patterns there and timing tells me to go long somewhere there https://invst.ly/we4iy
The bounce was difficult to trade both because the market bottomed later and deeper than anticipated (and actually looks like an overthrow beyond the orthodox top), but then the initial bounce retrenched - showing lower tops at the time, which caused several to run to their stop-losses. After finally breaking up, the market has struggled the last days showing mixed signals - and really making it difficult to hold longs and not reverse positioning. 4th waves are always complex. If the flat comes, the c-wave could be sudden and brutal. What to do - go long, go short, stay out, that is ever the market question.
'...beyond the orthodox bottom' . My apologies for having written wrong in the above.
today's wave brought to you by the Fed wasting our time talking. Every time they do the entire market empties to cash in this case day before and after. Look at every financial type. These fake "oh I'm scared" by the wealthy disrupts everything and any true investor has to become a day or swing trader because of this. Fed never told us anything with individuals appearing randomly or planned in the past. It has no use and great tool for big money. Same with the hundreds of people that slap prices and grades on stocks to influence like sheep to their benefit and their peers. Never in the history either waa it done. So we pay the higher capital gains because of this and insiders already in place.
Dr., how does one become a premium member?
https://intelligentinvesting.market/major-markets-trading/
Thanks Doctor
Dr, what about S&P500? Thanks a lot
I will cover the SPX next week
Thanks DR.
So you are projecting a potential fall to what SP500 level and time period … if the market chooses such?
SPX could be in a different pattern all together.
Still the SPX tends to follow the NAS100 trend due to the heavy tech weighting in both. Do you gave a corresponding lower target for the SPX? 200dma? Thank you.
*have
Thanks bro!
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