Nasdaq 100 Could Target $9500
Dr. Arnout ter Schure | Sep 23, 2022 02:13PM ET
Three weeks ago (see here) I was tracking a possible impulse move down for the Nasdaq 100 from the mid-August high (i.e., five waves lower as per the Elliott Wave Principle (EWP)). I wrote then:
Today's reversal candle suggests wave-iii completed, and wave-iv should now be underway, targeting ideally $12400+/-100. The index should not move above last week's low of around $12900, or it would invalidate this possible impulse path. Once wave-iv completes, wave-v should ideally target about $11400-11600.
The index had indeed bottomed for wave-iii, and wave-iv ended the next day at $12451. However, wave-v failed to travel the total distance and only reached as low as $11928 on September 6. This miss shows markets do not always have to follow text-book paths. That would be too easy. Regardless, that low completed an impulse lower.
The subsequent rally was a countertrend bounce, and now the index is impulsing lower again, following along the bearish path I recently shared for the S&P 500. Now that the market has stepped through this bearish door, the NDX's impulse path lower is shown in Figure 1 below.
Figure 1. NASDAQ100 daily candlestick chart with detailed EWP count and technical indicators
Black W-c comprises ideally five smaller red W-i, ii, iii, iv, and v. Those, in turn, are made up of smaller waves as well: green W-1, 2, 3, 4, 5 for red W-iii/c. The progress of these waves is shown in Figure 1 with the green dotted arrows and their associated Fibonacci-based ideal price target zone. This (green) path remains the focus until proven otherwise.
The otherwise, in this case, is presented as the red "alt: a, b, c" EWP count (red dotted arrows). It would mean the index bottoms around $11000+/-200 over the next few days and then stages a rally back to or potentially even exceeding the August highs. It would require a break above the green W-2/b level (Wednesday's high at $12062) to suggest this will happen. But, for now, the red path remains an alternative, although it can be used to place appropriate stops, etc., and thanks to the EWP, we have an excellent general road map to help us navigate the markets.
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