NASDAQ 100: Is Correction Over? Or Is There More To Come?
Dr. Arnout ter Schure | Oct 22, 2021 03:32PM ET
Three weeks ago, see here , I was looking for the NASDAQ 100 to bottom soon, ideally around $14700-14850. Because "three waves down appear to be (close to) complete" and I showed "a bounce … should be expected soon before minute-c completes (green) minor wave-4 later in October at around current price levels."
The bounce was projected to reach $15000-15500 (See Figure 2 in that article).
Fast forward, and the NDX bottomed a few days later than expected, as the final 4th and 5th waves wrapped up, but right around the ideal target zone (see Figure 1 below). Besides, please see my tweets Elliott Wave Principle (EWP) is, in my opinion, best suited for forecasting the intermediate to longer term.
Figure 1 NDX100 hourly candlestick chart with EWP count and technical indicators.
Thus, there are three waves down (red A, B, C, made up of a 3-3-5 internal pattern) since the early September all-time high at the early October low.
As always, "after three waves down, expect at least three waves back up." And here we are, there are now and so far three waves up: (red A, B, C, made up of a 3-3-5 pattern as well). Besides, the C-wave reached the ideal target zone and tagged the 138.20% extension of wave-A, measured from the wave-B low.
Lastly, if this is still the preferred flat correction, the index rallied high enough as the bounce needs to be at least 90% of the prior (A-wave) decline. Thus, it now is "do or die time" for my "flat thesis." What does it take to confirm: A break below the A-wave high at around $15,000. The bulls' first warning will be on a break below $15,115 from current levels as that would signal a possible 4th wave lower is off the table.
"Fourth wave?" I hear you ask. Yes, the index could already have completed its correction and is now tracing out either a common impulse higher or a diagonal. See Figure 2 below.
Figure 2 NDX100 hourly candlestick chart with EWP count and technical indicators.
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Indeed, although my preferred option is for a more significant, longer-drawn flat correction, I must also be mindful of the fact that a correction is always at least three waves down, and the index just experienced it. For now, the upside target zone laid out three weeks ago has been reached to the T, as was my downside target zone. Thus, I consider my recent assessment and forecast as complete and successful, and I will now let the market decide which path it wants to take.
As things are becoming a little less confident, and trading is all about risk management, I, therefore, suggested to my premium major market members over the last few days to raise stops and/or lock in profits. The easy money to the upside has now been made. May I suggest you do the same?
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