Two weeks in the past, see right here, we discovered for the (NDX) utilizing the Elliott Wave Precept (EWP),
“… the final path specified by late October stays our focus and is filling in quite effectively. As soon as black W-a tops (ideally round $12-12.6K), I nonetheless count on a large pullback first (W-b) to ideally $11.2K +/- 200 earlier than the subsequent rally (W-c) begins to ideally $13.8-15.4K. I can slim this goal zone down as soon as extra worth knowledge turns into obtainable.”
After two weeks of sideways consolidation, the index broke larger on Powell’s speech on Wednesday and reached $12115 yesterday, solely to drop decrease on higher than anticipated at the moment. Because the saying goes, “The market giveth, the market taketh away.” The index is just one.7% larger since my final replace, so the query is: the place does all this whipsawing lead us?
See determine 1 above. My main expectation is that the index topped yesterday for an irregular b-wave of an irregular flat in EWP phrases (see instance right here). It ought to now be engaged on the ultimate (crimson) c-wave decrease to ideally $11300-11600 for the bigger black W-b earlier than the subsequent rally (black W-c of blue W-B) to ideally $13.8-15.4K begins. The technical indicators look barely drained, with detrimental divergences (dotted orange line), and able to transfer decrease. However that could be a situation, not a sign.
Particularly and nevertheless, if the bears can’t muster a breakdown, then the choice possibility I’m monitoring turns into operable. In that case, a extra fast five-wave rally to ideally $13.2+/-2K will change into the first path. See determine 2 under.
Determine 2.
Simply as a reminder, whereas some misunderstand the EWP and my work, claiming that I am saying the market will both go up or down, I solely have a look at it from the angle of possibilities as a result of there are not any certainties. Subsequently, every little thing must be approached with “if/then” views. I present these views by rating probabilistic actions primarily based on the construction of the value motion. I supply a main EWP perspective, and if that sample breaks because of the worth breaking above or under a sure degree, it tells us that the evaluation was improper. The choice EWP possibility is then operable. In a probabilistic surroundings, there’s by no means one possibility. If there have been, then it might not be a probabilistic surroundings however a certainty. This strategy is like a military basic getting ready a main battle plan and, concurrently, a contingency plan if the preliminary battle plans don’t work. We put together for battling the markets in the identical method.
Backside Line
Two weeks in the past, we discovered that:
“The basic path specified by late October stays our focus and is filling in quite effectively. As soon as black W-a tops (ideally round $12-12.6K), I nonetheless count on a large pullback first (W-b) to ideally $11.2K +/- 200 earlier than the subsequent rally (W-c) begins to ideally $13.8-15.4K. I can slim this goal zone down as soon as extra worth knowledge turns into obtainable.”
After two weeks of go-nowhere worth motion, the NDX lastly reached the best goal zone yesterday. It topped at $12,1K. At the moment’s decline needs to be the initiation of the ultimate decline to that W-b goal zone earlier than W-c begins. That’s the main battle plan. Our contingency plan is that on a extra fast breakout above yesterday’s excessive, we’ll search for the index to achieve $13.2+/-2K with out a extra vital pullback.
