I appears this years price action in the NASDAQ-100 formed a seven wave diametric pattern on the one month wave chart. The primary defining characteristic of a diametric pattern is the time similarity of its constituent waves. Most of the waves took around two months to form.
If this wave count is correct, I would expect the market to rebound sometime in late January or early February. Wave-E should consume four units of time, so I expect it will either be a flat or a zig-zag pattern. Since little wave-a was completed in about 2.5 weeks, I would expect little wave-b to take 2.5 weeks or more to complete. Little wave-c will most likely be less than or equal to little wave-a in price.
I am taking a mostly neutral position on the market because the current wave pattern suggests slow price action over the first several weeks of the 2023. The long term wave pattern also suggests the markets price action will remain corrective in nature for at least the next 2 - 3 years. In addition, the overall economic situation does not look promising for the development of a sustained bull market. The yield curve is still inverted, which indicated a high risk of recession sometime between now and the middle of 2024. There could be some good buying opportunities late first quarter or early second quarter of next year, but for now I my plan is to watch and wait.
Note:
This wave count would proven incorrect, if the market moves significantly lower than the October low at some point in the next several months.
If this wave count is correct, I would expect the market to rebound sometime in late January or early February. Wave-E should consume four units of time, so I expect it will either be a flat or a zig-zag pattern. Since little wave-a was completed in about 2.5 weeks, I would expect little wave-b to take 2.5 weeks or more to complete. Little wave-c will most likely be less than or equal to little wave-a in price.
I am taking a mostly neutral position on the market because the current wave pattern suggests slow price action over the first several weeks of the 2023. The long term wave pattern also suggests the markets price action will remain corrective in nature for at least the next 2 - 3 years. In addition, the overall economic situation does not look promising for the development of a sustained bull market. The yield curve is still inverted, which indicated a high risk of recession sometime between now and the middle of 2024. There could be some good buying opportunities late first quarter or early second quarter of next year, but for now I my plan is to watch and wait.
Note:
This wave count would proven incorrect, if the market moves significantly lower than the October low at some point in the next several months.