|

Nasdaq 100 Elliott Wave update: Final rally to 26,700 underway

the [possibility] of a larger W-4 correction to be underway to between 20485 and 22835. However, we need to see a weekly close below 24000 for higher confidence (75% chance) that this is the case, as the index missed the ideal upside target [26700] by about 500 points or 2%. This gap is notable because stock markets tend to be more precise. Therefore, the index may still be in its minor 4th wave, to be followed by the final 5th wave (green W-5) closer to the 26700 level. The ideal target zone is 23000-24000, but the index doesn't necessarily have to go that low.

Fast forward to today, the index bottomed at 23854 on Friday, November 21, within the ideal (minor) W-4 target zone, and closed that week at 24239. It is now trading around 25575. Therefore, the index remained above 24000 for the week, supporting our preferred scenario illustrated in Figure 1 below. Additionally, the index bottomed in the ideal “low risk buy zone,” which we advise our premium newsletter members to use as a swing-trade trigger.

Figure 1. Intermediate-term Elliott Wave count for the NDX

The Bulls’ warning levels are currently set at 25369, 25158, 24873, 24542, and 23854. Daily closes below each subsequent level increase the chances that the uptrend from the November 21 low is over by 20%. For example, these levels can be used as stops, while they will be raised as prices continue to move higher.

Namely, in our previous update, we examined the 65-minute chart, see Figure 2 below, and found

the price action since the recent ATH has been trending lower, overlapping. …, it indicates that the downward move is corrective and will eventually resolve to the upside. Meanwhile, …, positive divergences ([green] arrows) are building in the technical indicators, suggesting that at this stage, the downside is losing strength, momentum, and selling pressure.”

So far, so good. Applying the EWP to the price action from the November 21 low on the same 65-minute chart, we see that the rally is currently an impulsive move: five-wave advances and three-wave corrections.

Figure 2. Short-term Elliott Wave count for the NDX

We expect the orange W-3 to peak at the 161.80% extension (~26635), followed by the orange W-4 reaching 25300 ± 100, and a final W-5 to complete the gray W-iii at 25900 ± 100, etc. The ideal gray W-v target zone is 26500 ± 250, which will bring the index close to the ideal ~26700 target for the (much) larger black W-3. The Bulls’ short-term warning levels are set at 25443, 25158, 24542, 24214, and 23854.

Author

Dr. Arnout Ter Schure

Dr. Arnout Ter Schure

Intelligent Investing, LLC

After having worked for over ten years within the field of energy and the environment, Dr.

More from Dr. Arnout Ter Schure
Share:

Editor's Picks

EUR/USD recedes to daily lows near 1.1850

EUR/USD keeps its bearish momentum well in place, slipping back to the area of 1.1850 to hit daily lows on Monday. The pair’s continuation of the leg lower comes amid decent gains in the US Dollar in a context of scarce volatility and thin trade conditions due to the inactivity in the US markets.

GBP/USD resumes the downtrend, back to the low-1.3600s

GBP/USD rapidly leaves behind Friday’s decent advance, refocusing on the downside and retreating to the 1.3630 region at the beginning of the week. In the meantime, the British Pound is expected to remain under the microscope ahead of the release of the key UK labour market report on Tuesday.

Gold looks inconclusive around $5,000

Gold partially fades Friday’s strong recovery, orbiting around the key $5,000 region per troy ounce in a context of humble gains in the Greenback on Monday. Additing to the vacillating mood, trade conditions remain thin amid the observance of the Presidents Day holiday in the US.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.