September 26, 2023: NASDAQ Elliott Wave and Technical Analysis – Charts
A lower target is used for both Elliott wave counts.
Note that the S&P 500 and NASDAQ do not always find highs and lows together. The last all-time high for the S&P 500 was on January 4, 2022, whereas the last all-time high for NASDAQ was November 22, 2021.
Last updated monthly charts are here.
BULLISH WAVE COUNT
Price moves lower for intermediate wave (4) within primary wave 1.
Intermediate wave (4) cannot enter intermediate wave (1) price territory below 11,210.38.
An Elliott channel is drawn using Elliott’s first technique. Draw a line from the end of intermediate wave (1) to the end of intermediate wave (3), with a parallel copy placed on the end of intermediate wave (2). Intermediate wave (4) has broken out of the lower edge of this channel.
Once intermediate wave (4) is labeled complete, the channel will be redrawn using Elliott’s second technique. A channel drawn using Elliott’s first technique does not always work, which is why he developed a second technique to redraw the channel if the fourth wave was not contained within it.
Intermediate wave (4) has a target calculated at 12,827.22, the 0.382 Fibonacci ratio of intermediate wave (3).
Price has declined with increased range and momentum.
Intermediate wave (4) is expected to be in minor wave C, pulling price lower within minute wave iii.
Minute wave iii has a target calculated to reach 12,632, the 2.618 Fibonacci ratio of minute wave i.
BEARISH ELLIOTT WAVE COUNT
This alternate sees cycle wave IV incomplete and expects the current bullish movement to be a rally within a larger bearish trend. For the long term, price is expected to continue down for the end of primary wave Y and cycle wave IV.
A channel is drawn using Elliott’s first technique. Draw a line from the end of minor wave 1 to the end of minor wave 3, with a parallel copy placed on the end of minor wave 2.
Intermediate wave (C) has a target calculated to reach 1.618 times the length of intermediate wave (A) at 14,326.
Minor wave 4 cannot move into minor wave 1 price territory below 11,210.38.
Once primary wave X is labeled complete, a low below 12,269.55 will add confidence to this wave count because it is the invalidation of the main wave count.
Minor wave 4 continues down, with increased bearish momentum.
This wave count sees minor wave 4 subdividing as an incomplete double zigzag, currently within minute wave y.
Within minute wave y, minuette wave (c) is expected to pull price lower with subminuette wave iii moving down with increasing momentum.
Minor wave 4 is expected to continue lower, with a target calculated at 12,287.22, the 0.382 Fibonacci ratio of minor wave 3.
Price continues to consolidate within support at 12,500 and resistance at 14,250.
Price moves below resistance at 13,300 with overall declining volume.
ADX now increases with a bearish trend. ADX increases from a low point and below both DX lines. This is the strongest bearish signal that ADX can give.
On Balance Volume has previously broken out of support, giving a bearish signal.
This trend is not currently in danger of ending, and is expected to continue.
NAAD WEEKLY CHART
Nasdaq price is making higher highs, but the Nasdaq AD line has made lower highs. This divergence is bearish, and it shows that the rise in price does not have support from rising market breadth.
Nasdaq AD line is making new lows while price makes higher lows. This bearish divergence continues back to 2009.
Published @ 11:45 p.m. ET.
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New updates to this analysis are in bold.