Nasdaq 100 NDX double bottom or another dump?

There are 2 options (obviously), up or down. For the move up i see one scenario and that is a strong move up today and tomorrow towards the 7300/7350. If that happens it will form a W (double) bottom formation which could bring the prices back to the ATH. For this to happen we need to see that blue line happen as we can see in the chart on the right. Would mean that possible inverse H&S gets triggered. If it gets triggered we have a target around the 7320, which is the resistance line of the W bottom. If that gets broken, we could go towards the ATH again

Second option is we stay below 7200/7250. The two red lines, this would mean the inverse H&S is not real and we see a slow breakout and stay below that first red resistance area. Or the other options, we break that small upwards trend line from yesterdays lows and we just continue to drop again. A big triangle could also be formed, but i will draw it if it starts to look like that, otherwise things get too complicated. Since today's opening was a bit disappointing the bears are slightly in favor, but i think the real direction will get chosen in the last 2 hours before closing. So the upwards move could still happen.

Just need to watch which of those 2 trend lines gets a real break, that will give a good indication of the direction for the comings days.


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Previous analysis:

www.tradingview.com/...ctal-next-wave-down/

Comment:

I zoomed in a bit to make the picture clearer. The yellow circle shows a rejection of the inverse H&S neckline, which is bearish sign. If that green support breaks, we will probably see a retest of yesterday's lows. As long as it stays above that green, it could still make another attempt.

On the left we see that possible triangle i talked about. So if we do break that green support level but bounce up again from yesterday's lows, we could see that triangle form. But like every triangle, it can break out on both ways, but of course the bearish version is more likely.

Comment:

Broke that green support yesterday and got a very nice dump that broke the previous lows very easy.

We have a possible big H&S with the neckline around 6950/7100. At the moment we have a resistance of the previous lows (left chart) and i think yesterdays level around 7050 will be an important one as well. If the 7050 breaks we could see an even bigger recovery, especially if the bulls break that trend line on the right. Big chance we will see some sideways movement the coming days.

The bears stay in favor until that trend line breaks

Comment:

Seems i was wrong about the possible sideways movement (unless THIS is the range) but look at that rejection from that level i mentioned the past 2 days, what a key level that has been.

This big rejection has actually confirmed that H&S i was talking about yesterday so a drop to 6300/6400 has become very likely. To be honest, i did not like this H&S that much because of it's shape, but this rejection AND the new low we have made just now is a confirmation. Now every pattern can fail, even after confirmation, but this one has everything in it's favor now. Allot of stocks have bearish patterns as well of which the targets have not been reached as well. So there is room for that 6400/6300 target to get reached.

Comment:

On the left we can see the drop has stalled a bit creating bullish divergence (when using indicators). Now i see 2 options here, if we see a good quick move towards that neckline, we could see a possible inverse H&S when following that blue line. If the move goes slowly up and sideways, meaning not enough strength to push up, it will probably be a matter of time before it drops again.

One thing is very clear, that blue trend line, anything below that line is bearish. If that line breaks, we can assume the big H&S gets invalidated as well.

Comment:

Based on the weakness of the us markets today, that H&S seems to be in play with a target around 6300/6400, as I showed in my Nasdaq analysis. So the bear market is become much more realistic. If we see that target getting reached this week, the stock market will have a very hard time to recover from that blow. I will post an update later today