What’ll ya have, what’ll ya have?
What’ll ya have, what’ll ya have?
I will be concentrating mostly on the Nasdaq in it’s various forms tonight because I feel that it offers the clearest pattern of the group. As noted earlier, both the $COMPQ and $NDX were leading the advance today. The breadth today, across all indexes, was very positive, but significantly less bullish than yesterday. Some of our other momentum indicators are starting to exhibit signs of waning strength and/or topping
Let me cut to the chase. The $NDX and $COMPQ have a history of spiking past typical reversal levels during tops, while the blue chip indexes will lag. While the $COMPQ is well within our sited range of 2401, we must respect the potential of the $COMPQ to continue to rally higher.
I’ll mention the blue chips here before I focus on the tech indexes. The gap range is 11811 in the $INDU, and 1322, which is also the 50% retacement, in the $SPX. The $INDU and $SPX are showing a different retracement percentage at the moment. If either index pushes past it’s gap resistance, we would expect resistance from the next fib level. In the $INDU, this is the 50% fib at 11982 and the 38.2% in the $SPX ringing in at 1345. For now, let’s target the gaps, and we will adress these targets later if need be.
Something interesting that I noted today was the fractal progression of the wave pattern. Let me preface my explanation with a little clarification on timeframes of trends. The nifty little trend icons on the right side of our site indicate short and long term trend direction. The short term trend icon represents and trend minor (called medium later for ease) or smaller. The long term trend covers anything intermediate (called large for ease) or larger.
That said, the chart below illustrates how the financial markets opperate in a fractal fashion. While I am not claiming this fractal precision will be the top of the $COMPQ, the Elliott enthusiast would appreciate it’s significance. Basically, the red arrows and rising green arrows are completed Elliott patterns of different degrees. They represent the typical 1-2 decline in both large (intermediate) and medium (minor) degree. The larger decline, while not filling the open gap, stopped just shy of the 43% retracement level. As it stands right now, the most recent rallied touch 43% today, and turned away. During this push, the $COMPQ managed to close slightly more than half of the open gap. Obviously, I would prefer a complete closure, but this could be close enough to consider it closed.
The other most likely target range surrounds the 23.6% retracement level of 2460. This is still some distance above and represents a common spike reversal range.
A few more things to note are the daily time relationship, which has taken the full 61.8% we would expect from any 2nd wave. Also form has dipicted 7 overlapping wave upward on a daily chart, which is a valid corrective move. This means the index could be in its last legs, falling soon or with intraday push down and then up. However, we will wait for a confluence of evidance pointing lower before we update that a top is, in fact, in place.
Please note that the numbers and letters on the chart are operating wave counts, and do not represent the lettering of the potential scenarios. The dotted orange lines represent potential scenarios, both of which holding an equal weighting and potential outcome. Whether it be from 2401, 2460 or elsewhere, the ultimate resolution should be a persistant decline.
Skol.
