For those who follow me, and read my updates regularly, I’ve been tracking the NASDAQ-100 (NDX) for some time now (see my post from two weeks ago here, and from 4 weeks ago here) rather successfully if I may say so myself (although I rather hear it from others) as it tagged the forecasted 1.618x extension to the T first, then reached the forecasted 1.000x extension to the T as well and moved up over the past two days from that level. That’s two for two, so let’s see if we can maybe swing a triple here, but I do get cautious when I get several turns in a row correct because the markets are not (supposed to be) that easy…
For now, I view the NDX (and NAS for that matter) as having bottomed in red wave-iv right at the 100% Fib-extension of wave-i measured from the wave-ii low. Ideally we’d now see a move to the 200% extension to complete an impulse up. If this will be the final top, or only wave-i of a much larger 5-wave impulse up off the April low remains to be seen.
The alternate view is that wave-4 bottomed not early-April, but late-April and the mid-June high was simple wave-i of wave-5 and wave-ii is still underway. A move and close below the 50-day Simple Moving Average, will confirm this POV and price should then target around $6750 +/- 50. The reason I -for now- view this as an alternate (lower odds) possibility is in part because the Russell2000 (RUT) is following a similar pattern as the NDX, and has also tagged the 1.618 and 1.000x Fib-extensions to the T. See daily RUT chart below. Normally I treat every index on its own (just look at the S&P and DJIA for example, on how different their respective price patterns are), but I do like the similarities here.
Based on the price action we have at hand, I will review the Elliot Wave (EW) possibilities for the S&P tomorrow, as the above EW-count means we can start to narrow down some of the options I presented earlier this week for the S&P (see my post here).
Founder and President Intelligent Investing, LLC
Vice President NorthPost Partners, LP