NASDAQ bullish push continues, returning to the bull market

NASDAQ 100 traders take over this week and carry it to the "bull market" side amid fears for the future of the United States economy.

The NASDAQ 100 Index futures are advancing on Tuesday over 253 pts or 3.6% moving over the 8,280 pts again, placing the tech-heavy index on the bull market side since it currently trades above 20% of its 52-week high, at 7,804.9 pts, which marks the border with the bear market. This surge comes amid a context of mounting negative news about the course of the United States economy. In particular, there is a growing use of the term "recession" in different media.

On Monday, former Federal Reserve Chair Janet Yellen, in an interview, noted that the economy is in a "completely shocking" recession that cannot yet be seen with current data.

Yellen added that the increase in unemployment in the United States could move between 12% and 13%, while the economic contraction could mean a 30% drop in the U.S. GDP.

Previously, former FED Chair Ben Bernanke, in an interview on March 25th, noted that this crisis is more of a "snowstorm" than an economic depression like the one recorded in the "Great Depression of 1929". He added that it lasted 12 years and came from human problems and not from a natural disaster like the current crisis caused by the virus.

Finally, former Chair Bernanke commented that he expects the recession to be "very acute," but the recovery would be "quite fast."

From the perspective of Elliott wave theory, NASDAQ 100 on its 4-hour chart shows the price progress in a wave ((iii)) or ((c)) of Minute degree labeled in black.

This bullish sequence started at the low of March 22nd when NASDAQ 100 found new buyers at 6,629.3 pts and led the price to overcome previous highs reaching 7,790 pts on March 31st. In this way, this can be the first bullish movement made out of five waves that could correspond to a wave ((i)) or ((a)).

As we can see, this bullish movement occurred before the interview of former Chairman Bernanke, which was issued on March 25th.

Once the price action surpassed the last high of wave ((i)) or ((a)) of Minor degree at 7,990, NASDAQ 100 activated a new five-wave upward movement that could correspond to a wave ((iii)) or ((c)).

It should be noted that this bullish sequence belongs to a wave (B) of Intermediate degree labeled in blue, which, according to Elliott wave theory, must contain three internal waves.

Consequently, the current movement belongs to a larger structure made of three waves of Minor degree identified in green, which is still in the process of formation.

In conclusion, in the short term, our preferred position is on the bullish side until we see the completion of wave (B) in blue. However, in the long-term perspective, the bias remains on the bearish side.

---

Try Secure Leveraged Trading with EagleFX!