S&P 500 & Nasdaq Analysis and Trends

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Did the NASDAQ100 Put In a Major Top?
By: Dr. Arnout Ter Schure | February 13, 2024

• Yesterday, the index reached $18K, as forecasted in our last update. Although one last push higher to ~$19K cannot be excluded, the downside risk is at least 15% from current levels.

Completion of an Impulse

In our last update from two weeks ago, see here, we knew for the NASDAQ100 (NDX), based on the Elliott Wave Principle, that,

“…an impulse consists of five waves; so far, there have been only three waves since the January 5th low. Hence, we must expect another grey W-v to ideally $17738-890 once the current minor correction since last week’s high has run its course while staying above critical price levels. Note that the grey W-iv typically reaches the 100% Fib-extension level but can also bottom at 123.60% or 76.40%.”

Fast-forward, and the index bottomed out on “FED-day” right at the 76.40% level ($17128 vs. $17093) for grey W-iv and rallied up to yesterday to $18041 for grey W-v, only to fall out of bed today. See Figure 1 below. Moreover, the colored boxes and dotted arrows show the corresponding wave target zones and the general path forward based on the standard Fibonacci-based EWP impulse pattern forecasted on January 19, respectively.

Figure 1. NDX hourly chart with detailed EWP count and technical indicators



Today, the index broke below two of the four colored warning levels we presented to our premium members yesterday. I.e., the colored dotted lines (blue, grey, orange, and red) subsequently increase the warning levels for the Bulls, which can be used to prevent havoc on one’s portfolio. A drop below the red line from current price levels will strongly suggest that the rally from the January 5th low and even the October 26th low has ended.

We Can Only Outline The Markets’ Potentials, Not The Certainties

But by using the EWP, we always have price levels above or below, which lets us know if the market is still on the right path. Thus, our alternative scenario using the regular NASDAQ, as shown in Figure 2 below, remains the same as last.

Figure 2. Daily NAS chart with detailed EWP count and technical indicators



Namely, given that the rally from the October 2023 low was essentially straight up with very consecutive few down days, besides the five-day decline into the January 5 low, the correct interpretation of the price action from an EWP perspective is more complex. As such, yesterday may only be the green W-3 of the red W-v. As found in our last update,

“a pullback to around NDX17100+/-100 and NAS15250+/-100 for the green W-4, followed by another rally for the green W-5, should be anticipated.”

But, below the red warning level (the orange W-4 low on “Fed-day”) increases the odds the black W-4? is underway to ideally NDX15200+/-200, NAS13,800+/-200. That is where the 38.20% retrace of black W-3/c and the Volume-Price shelf resides. Lastly, please note that a break below the October 2023 low tells us the bull market is over.

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