Many of our premium members and others ask: “Contrary to the first presidency of Trump, this administration seems careless in the field of financial markets and adopts some economic pain. Will they cause bears?” And “What about tariffs and politicians of Trump market storped?” Because market moods push the lowest levels and stress levels at the highest levels (something we saw earlier), we naturally ask if the market can be broken. In compact, these questions doubt the narrative, which has always strengthened trust in American stock market markets. Because we have learned “never to establish an American economy.”
However, when assessing the price charts on the stock exchange, we get an objective idea of their condition. In our previous update we found using Elliott Wave (EW) for Nasdaq100 (NDX)
“… The index probably ends with an irregular extended apartment in EW: W> C> B> A. The ideal goal is to expand 61.8% … at 19940 USD, which the index is approaching today … If the index can maintain this level, especially 50% of the FIB-Extension extension in the amount of 19646 USD.
The index did not maintain this level, last week in 19152 USD. Therefore, we assessed our number of EW again, while allowing an irregularly extended flat scenario, though in the rank of wave by one highr. See Figure 1 below.
Daily NDX chart with a detailed number of Elliott wave and technical indicators
Because the financial markets are stochastic and probabilistic, i.e. follow IF scripts/then and why those who are looking for certainty will never stop searching, we must provide an alternative. Namely, the price campaign from December last year was complicated and challenging to decipher. He produced a three -wave move down to the lowest level of January, and then a three -wave transition to February. It can be part of irregular flat, 3-3-5 correction, as shown in Figure 1 above. Or is part of a larger final diagonal, the 3-3-3-3-3-3-3 pattern. See Figure 2 below.
Daily NDX chart with a detailed number of Elliott wave and technical indicators
The first option suggests that the correction is completed, and the NDX is ready to go to a modern five-sea rally to the final 24200-26500 USD, with red WIA first to around USD 21,000 +/- 400. The path shown in Figure 1 is uncertain, because insufficient price data is available. Figure 2 shows the reflection potential to USD 20800 +/- 400, followed by the final lower leg (red toilet) to the best 17,800 USD +/- 400. That’s why we prefer to look higher, maintaining above the low level last week.
Finally, we want to share our review of enormous images. See Figure 3 below. In this case (black) W-1 is the 2020-2021 rally, and the 2022 bears are W-2. Rally, therefore, because there is (part) W-3. As such, the index clearly made only three waves compared to Covid Low Covid. That is why we expect the next W-4, 5 sequence, because the financial markets are moving in five waves in the long run.
NDX weekly chart with a detailed number of Elliott wave and technical indicators
In the standard impulse pattern based on Fibonacci, the third third wave, in this case (red) W-III (black) W-3, tends to aim in 100-123.6% of the W-1 extension, measured from W-2. The fourth wave often returns to the extension of the FIB 61.8-76.4%, followed by the fifth wave focused on extension 138.2-161.8%to complete a more significant third wave. However, the latter does not have to achieve so high; It can also be stopped with an extension of 123.6%. As long as the third wave is not the shortest wave of three waves that move higher (W-1, 3 and 5), it can expand or shrink.
In this case, the red W-III reached a 100% FIB extension, while the red in the right side of the W-IV between red extensions 61.80 and 76.40%. Then the high February was 546 points (2.4%) with 123.6% extension. So far so good. Because the fourth waves often return 23.6-38.2% of the previous third wave, the red box in Fig. 3, may mean an extension of 76.4% at about USD 18,000 for a more extensive WABC sequence, about 38.2%.
Even if the index reaches an extension of 61.8% at ~ USD 16600, the bull housing would still be alive, although summed up under pressure, because in this case 5 It is wrong and that a much more significant level was hit, even if it was unconventional.
