I expect NASDAQ to hit ~6838 in the next 1 or 2 trading sessions. If my chart accurately predicts the next couple moves, we should see a move up to ~7085 over the first few hours of trading on 3-28-2018. This will be wave 4 of the 5 wave complex down that form wave C of the ABC correction now underway. I expect wave 4 to be a 50% correction of wave 3 because wave 2 was a 50% correction of wave 1.
Next after our touch to ~7085, the NASDAQ should then make its way down to 6838. A move to ~7085 and a subsequent move down to 6838 would make a nice 1:1 extension of wave 3 down, and turn wave C into a perfect 1.618 extension of wave A.
It may not play out exactly as scripted above, but this should serve as a general outline.
If we do see a move to 7085, with a subsequent move down an aggressive trader might purchase SQQQ (3x NASDAQ short fund) for up to a 10% gain by targeting an exit from the fund when the NASDAQ comes close to the 6838 target.
Next after our touch to ~7085, the NASDAQ should then make its way down to 6838. A move to ~7085 and a subsequent move down to 6838 would make a nice 1:1 extension of wave 3 down, and turn wave C into a perfect 1.618 extension of wave A.
It may not play out exactly as scripted above, but this should serve as a general outline.
If we do see a move to 7085, with a subsequent move down an aggressive trader might purchase SQQQ (3x NASDAQ short fund) for up to a 10% gain by targeting an exit from the fund when the NASDAQ comes close to the 6838 target.
Trade active:
Well, my idea about a small wave 1 failed. Instead, it looks like the true wave 1/2 complex may have just completed today. It is always hard to pick out waves 1/2 because you have to wait for confirmation of the complete complex, but I believe that making your best educated guess with the information you have available and then waiting for conformation before entering the trade is the best route to take. In this case, I have not yet entered a trade since my thesis has not been verified. However, as seen above, I have adjusted my projections based on the new information available. I now see the NASDAQ heading toward 6550 to 6600 in the days ahead (I remain a bear despite Thursday's action till confirmation that the recent trend has reversed). I will likely enter a trade buying SQQQ if the NASDAQ gets below 6900 on the path outlined above. 6750 would give wave 3 a 1:1 extension of wave 1 while 6550 would be roughly a 1.618 extension (and also a nice 1:1 extension for wave C of wave A down as redrawn above). I would likely take profits intermittently between 6750 and 6600.
Trade active:
So far it appears the new wave count may be correct. I'll be monitoring this very closely at this point since I entered a significant short position via SQQQ when the NASDAQ was around 6900 as I described above. If the NASDAQ breaks significantly from the outline I have generated (I will allow that wave 3 could retrace a little earlier than anticipated here), then I will look to close my trade and lock in any profits. My guide as to whether I exit the trade early will be the trend line pointed to above. I'd appreciate any thoughts.
Trade closed: target reached:
Well folks. Guess the market has a sense of humor. As you recall, my initial post here predicted a fall to 6838 in a 5 wave pattern (creating correction wave C) off what I thought was a wave 1 complex. Then I changed my thought process because the next moves (particularly what is now clearly wave 4) seemed to negate my initial thesis. However, as the market has unfolded the last few days, it turns out I was right, but just off by a day.
As you can see above, my original wave 1 was in fact wave 1. Wave 4 retraced more than anticipated, but wave 5 did finally get us just beyond our target as the IXIC reached 6810ish. Had I stuck to my original idea, this would have been an awesome trade. As I continue to study/learn/process Elliott wave theory, I hope to develop more confidence and patience...seems lately I've been expecting the market to move just a little faster than reality (see my previous MU prediction where I was a few hours off as well). Hopefully as I continue this process, my ideas will incorporate this reality and they will be that much more powerful and predictive. I hope this was helpful.
Well, I'm closing this idea since it actually came to fruition (though not on the exact timeline I expected), but I will likely be posting the above image as a new idea soon with additional details.
As you can see above, my original wave 1 was in fact wave 1. Wave 4 retraced more than anticipated, but wave 5 did finally get us just beyond our target as the IXIC reached 6810ish. Had I stuck to my original idea, this would have been an awesome trade. As I continue to study/learn/process Elliott wave theory, I hope to develop more confidence and patience...seems lately I've been expecting the market to move just a little faster than reality (see my previous MU prediction where I was a few hours off as well). Hopefully as I continue this process, my ideas will incorporate this reality and they will be that much more powerful and predictive. I hope this was helpful.
Well, I'm closing this idea since it actually came to fruition (though not on the exact timeline I expected), but I will likely be posting the above image as a new idea soon with additional details.