Nasdaq – Corrective Wave C where does it stop?
I made some tweaks to my long-term wave analysis of the Nasdaq. I thought that there maybe a small correction then one more rally high up before a major correction. However, after some more noodling through it this morning, there is a more than zero chance that the upcoming corrective wave C may be it. The rally off the recent low (Wave B) in March hit 1.236 of Wave A exactly on Thursday (long pin up to touch it). That would be the end of Wave B. This puts us in either an Expanded Flat or Running Flat corrective wave (both end at 123.6% of wave A). Here are the options.
Running Flat -> Wave C = 61.8% – 100% of wave AB
Expanded Flat -> Wave C = 123.6% – 161.8% of wave AB
That is a pretty big range to pick from. Based on my posted idea from yesterday, we have ended the super cycle motive wave for tech. Will this be the end-all corrective wave after such an impressive motive wave for the last few decades? If so, then an expanded flat would do it but it could take us all the way down to the 4500 range within a few months. Will the Fed pump give us a running flat that limits the pain in the short term, but we run the risk of a drawn out multi-year bear market that slowly and painfully works its way down to 4500?
FYI, the same pattern is developing in the S&P 500. The S&P looks to be in a Zig Zag Corrective wave. It hit 0.854 of Wave A instead of 1.236 like the Nasdaq.
Hope I am wrong and hope this helps. Good luck out there.
Running Flat -> Wave C = 61.8% – 100% of wave AB
Expanded Flat -> Wave C = 123.6% – 161.8% of wave AB
That is a pretty big range to pick from. Based on my posted idea from yesterday, we have ended the super cycle motive wave for tech. Will this be the end-all corrective wave after such an impressive motive wave for the last few decades? If so, then an expanded flat would do it but it could take us all the way down to the 4500 range within a few months. Will the Fed pump give us a running flat that limits the pain in the short term, but we run the risk of a drawn out multi-year bear market that slowly and painfully works its way down to 4500?
FYI, the same pattern is developing in the S&P 500. The S&P looks to be in a Zig Zag Corrective wave. It hit 0.854 of Wave A instead of 1.236 like the Nasdaq.
Hope I am wrong and hope this helps. Good luck out there.
Comment:
Given today's surge, then gata9aigatai's comment maybe right. There is zero reason why the Nasdaq should take this big of a jump this morning. Up a little maybe, but 3-5%. Its all Fed pump. The coronavirus cases are out of control in many areas, worse than before. Yet the market makes one of its biggest morning rallies in weeks. The only logical solution is that the Fed is manipulating the market to counteract all of the bad news. There is no other explanation that I can come up with. They were trying to let the market come back to life on its own while the cases where down, but with a major rise in cases comes a major rise in the Fed pump. I still believe it is just a house of cards.
