Nasdaq 100 - Expanded or Running Flat Correction
Updated
Ok, ok, ok, "this is like the tech bubble in 2001", "tech bubble, tech bubble", "overvaluations" , etc.
I get it, I personally would be cautious to take the ride further up, some people might say, ride the wave with the fed, with the bubble and that's cool but do it with very very smart SL positions as it can come crashing down fast as fuck.
Now, Elliot wave people would know the expanded and running flat corrections. You have wave B higher than start of wave A and then you have a wave C either lower than end of wave A (expanded) or higher than end of wave A (running). Afterwards, you would have a trend continuation move up with a move similar before the correction.
On the chart, I have circled possible zones for end of wave B and C but this is channeling the crystal ball too much - it is best to trade after confirmation. So on the daily chart we will start noticing divergences with the indicators - that's a good spot to short, check other timeframes as well for confirmation. Perhaps even wait for the first wave down of the wave C to go short.
Then ride it till you take some profit somewhere above end of wave A as a precaution and check price action there. I personally think it will do a expanded flat to trap more shorts before going up and continuing the trend.
Then again, the bubble could just swell further up parabolically but it doesn't look like it has much time - it is going freaking vertical each day. There are definitely some troubling stats: the top mega-caps are up 32% YTD while SPX remaining companies are -6.6% YTD, the NDX is about 70 companies in green YTD but you can definitely say that the mega-caps are pushing this up but it is too much tbh.
End game: short then long.
I get it, I personally would be cautious to take the ride further up, some people might say, ride the wave with the fed, with the bubble and that's cool but do it with very very smart SL positions as it can come crashing down fast as fuck.
Now, Elliot wave people would know the expanded and running flat corrections. You have wave B higher than start of wave A and then you have a wave C either lower than end of wave A (expanded) or higher than end of wave A (running). Afterwards, you would have a trend continuation move up with a move similar before the correction.
On the chart, I have circled possible zones for end of wave B and C but this is channeling the crystal ball too much - it is best to trade after confirmation. So on the daily chart we will start noticing divergences with the indicators - that's a good spot to short, check other timeframes as well for confirmation. Perhaps even wait for the first wave down of the wave C to go short.
Then ride it till you take some profit somewhere above end of wave A as a precaution and check price action there. I personally think it will do a expanded flat to trap more shorts before going up and continuing the trend.
Then again, the bubble could just swell further up parabolically but it doesn't look like it has much time - it is going freaking vertical each day. There are definitely some troubling stats: the top mega-caps are up 32% YTD while SPX remaining companies are -6.6% YTD, the NDX is about 70 companies in green YTD but you can definitely say that the mega-caps are pushing this up but it is too much tbh.
End game: short then long.
Note
Good so far, let's see if it will continue down. Short-term, I think it should go up to complete C correction before going down to lower Fib levels:Note
Note
Forgot to write about to monitor the current 1H candle. If it closes with a bullish engulfing at the support, then we should see further upside as more likely.Note
Don't like the volume on the 1H close, further upside potential now looses some % confidence.Note
It is developing exactly as crystal ballalized in the previous screenshot, however, I am not so confident it would make the wave C down due to the earnings beats from yesterday. The market could be on hopium today and move further up to previous high/ above it:Note
What a move down. Maybe we should start looking at reversal signs to continue up trend from here.
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