In our earlier replace from two weeks in the past, when the NASDAQ100 (NDX) was buying and selling at $19000, we discovered that
“contingent on holding above final week’s low, we should always permit the index to rally to ideally $19350+/-125.”
Over the subsequent a number of days, it topped out when the FED introduced its rate of interest resolution on Wednesday, September 18, at $19643 and dropped to $19330. Up to now, so good. Nevertheless, the market determined it didn’t have sufficient, closing the July hole at $20200 yesterday. See Determine 1 under. The query now’s, “Was that every one she wrote?”
Determine 1. NDX each day chart with detailed Elliott Wave rely and technical indicators
To reply that query, we should objectively assess the market from a number of views, akin to worth patterns (e.g., larger highs and lows vs. decrease highs and lows), worth developments (up vs. down), Elliott Wave Precept (EWP) counts, and technical indicators.
- First, the rally from the September low determined to subdivide, and we have now adjusted the EWP accordingly. Keep in mind, all we are able to do is “anticipate, monitor, and alter” when forecasting the markets, that are complicated programs. Regardless, the index by no means broke under any of our (coloured) warning ranges for the Bulls, which we alter each day for our premium members to maintain them on the proper facet of the market for so long as attainable. Thus, we stayed the course. These warning ranges have constantly been raised since our final replace, and the primary one (blue) now resides at yesterday’s low. Contemplate it a “radar lock”. The twond (gray) warning for the Bulls is $19750, round final Thursday’s and this Monday’s low. That’s the “shot throughout the bow.” And so forth. These ranges inform us that the probabilities of additional upside diminish with every breach. Beneath the 4th (crimson) warning stage, it’s “recreation over.” For now, it’s nonetheless larger highs and lows.
- Second, with no breach of any of those ranges, the EWP rely proven remains to be solely a chance. It should serve us nicely when confirmed, as we then know what extra vital wave (the crimson W-c/iii) the index is in, however at this stage, we can’t be positive simply but. That’s advantageous, as we let the market information our trades and by no means front-run.
- Third, the index is above its rising 10-day Easy Transferring Common (d SMA), which is above the rising 20d SMA, the rising 50d SMA, and the growing 200d SMA (inexperienced arrows)—a 100% Bullish chart. Apart from, the NDX can also be above its rising Ichimoku Cloud. That is one other line of proof telling us the present pattern remains to be up.
- Lastly, all of the technical indicators are nonetheless optimistic. The each day RSI5 is >70. The MACD factors larger and had a purchase cross in early September, whereas the cash movement (CMF) can also be optimistic.
The underside line is that the EWP shouldn’t be utilized in a vacuum. Certainly, it may counsel the NDX could have fashioned a major prime, however it’s nonetheless too early to verify this chance. We have to see the index’s worth drop under a minimum of final Wednesday’s “FED Curiosity Charge Day” low, with affirmation under the September 6 low, to inform us a decline just like the correction in July is underway. When it does, the EWP will serve us nicely in foretelling us the place we are able to count on the next vital low to materialize. So, we’ll watch the warning ranges carefully as we advance whereas staying snug lengthy since two weeks in the past so long as none of them are breached.
