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Potential Bullish Wedge Forming On NASDAQ 100

By Dr. Arnout ter Schure Stock MarketsJun 29, 2022 01:52PM ET
www.investing.com/analysis/potential-bullish-wedge-forming-on-nasdaq-100-200626477
Potential Bullish Wedge Forming On NASDAQ 100
By Dr. Arnout ter Schure   |  Jun 29, 2022 01:52PM ET
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Last week, I showed how the NASDAQ 100 could have put in a multi-year top. Since corrections can be notoriously complex from an Elliott Wave Principle (EWP) perspective, due to many overlapping bear market rallies, “anticipate, monitor and adjust if necessary” will now be necessary more than ever.

However, from the EWP we know that each correction, big or small, comprises at least three waves: a, b and c. Yes, bear markets are also corrections, but simply on a much larger time frame. Thus, if the NDX has put in a multi-year top, the current eight-month-long decline will only be wave-a, possibly even a smaller wave-a of a. Indeed, every bear market always has at least one multi-month counter-trend rally, wave-b, before the selling resumes in wave-c. At this stage, it appears wave-a could be completed sooner than many may think. Allow me to explain.

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

NASDAQ100 Daily Chart.
NASDAQ100 Daily Chart.

During the first three months of the year a possible bullish wedge pattern – or diagonal – was forming (red dotted arrow). If confirmed, i.e., a break out of the pattern, it would target NDX 15,000, because diagonals often get retraced to their start. The index did not disappoint and topped at ~15,300 in late March. Back then, positive divergence (solid green arrows) formed between the technical indicators (TIs) and price. Similar to the January-March setup, now an even larger possible diagonal is forming (dotted black arrows) and positive divergence is building again (dotted green arrows).

Based on the EWP count, the decline since the March and June highs can be considered complete, but as shown (grey “alt: iv”, “alt: v”) another stab lower to around $10,500+/-500 cannot be excluded just yet. Hence, that is why I state the pattern is possible: it has not been confirmed yet. There is a condition on the chart, but no trigger yet. The trigger will be a breakout, which holds, that then technically can target once again as high as ~15,000: dotted blue arrows.

Or, in other terms: forewarned is forearmed.

Potential Bullish Wedge Forming On NASDAQ 100
 

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Potential Bullish Wedge Forming On NASDAQ 100

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Comments (21)
Jorge Hg
Jorge Hg Jul 12, 2022 2:09AM ET
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In MAy, oil prices ranges from 105 to 120 and going upward, but in June oil prices were going down from 120 to 105. this means that there might be suprise low inflation rate for June on Wednesday. Inflation is arisen from high oil prices. We will see after tomorrow.
Mr Doodl
Mr Doodl Jun 30, 2022 8:42AM ET
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I guess the wedge will not be broken.
Adi Avivi
Adi Avivi Jun 30, 2022 4:27AM ET
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technical analysis is worthless on oil above 100, cpi above 8, gdp under zero, another 0.75 rate hike. only down
john sara
john sara Jun 30, 2022 3:55AM ET
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With the FED and other Central Banks of necessity getting out of the business of propping up markets this can mean multi year lows. The FED can't pull the same stunt again without causing raging inflation and they finally know it though they wiil shilly-shally thereby causing the process of declining markets to go on  longer even if slower.
Sidney Glover
Sidney Glover Jun 30, 2022 3:54AM ET
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one of the silliest articles. EWP and other oracles cannot and do not predict anything in the market. the article has so many caveats that would make a criminal attorney proud. Markets work on Financials of the company's activities, world events, emotions of the gamblers and manipulations of the meme crowd. Doing a "technical" analysis based on charts is like lighting a candle after a seance to explain the ac coming on as a ghostly event. what is the doctorate and where is it from? am I being harsh? yes as this article wasted my time.
Arinze Igwegbe
Arinze Igwegbe Jun 30, 2022 3:29AM ET
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people giving wrong analysis without taking note of charts and fundamental analyses. The bear market has coming to stay and it will last for months.
Rajesh Kumar
Rajesh Kumar Jun 30, 2022 3:21AM ET
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Oracle has spoken.
Rajesh Kumar
Rajesh Kumar Jun 30, 2022 3:21AM ET
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Oracle has spoken.
ECL SALES
ECL SALES Jun 30, 2022 2:50AM ET
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Please save readers time and right just one sentence - I'm bullish in a bear market.
Mr Crispy
Mr Crispy Jun 30, 2022 2:50AM ET
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right or write?
Pauline Nguyen
Pauline Nguyen Jun 30, 2022 12:59AM ET
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Wasnt this the guy saying NQ could go to 18k when it was $16K? Lol
 
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