The NASDAQ 100 non-financial stock market index has been in a strong uptrend since November 2008, when it bottomed near the 1000 mark. Now, more than five years later, it is approaching 4000. And while everyone is wondering what is left of this bull market, the Elliott Wave Principle can give us a hint of whether we should expect a substantial correction or not. The chart given below shows NASDAQ’s uptrend in weekly bars. As always, we will examine the wave structure of the price action, in order to determine if we should prepare for a reversal anytime soon.
The chart shows that the rally since late 2008 cannot be counted as an impulse, because it does not contain the necessary five waves. Instead, it looks more like a double zig-zag, labeled W-X-Y, which seems to be almost complete. Wave 5 of “c” of Y is supposed to finish the whole sequence around the 4000 mark. Accuracy demands observation of the smaller time-frames. The final stage of the fifth wave is visible on the chart below.
It appears that the zone around 4000 could provide a very strong resistance. An almost finished fifth of a fifth of a fifth wave, suggests that the rally of NASDAQ 100 may be running out of steam.
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