S&P 500 & Nasdaq Analysis and Trends

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Where Can We Expect the NAS100 to Top?
By: Dr. Arnout Ter Schure | March 21, 2024

• The “last push higher to ~$19K,” which we could not exclude in our last update, is now underway, with an ideal target of $18700+/-100.

Completion Of An Impulse

Unfortunately, we have not been able to provide a public update on the NASDA100 (NDX) since mid-February, see here, while our premium members continued to receive our daily updates. Since then, we have been tracking the Elliott Wave Principle’s (EWP) “green W-5” that we postulated back then:

“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.”

Moreover, when we wrote our last update, the NDX was trading at around $17600. Fast forward, and today, it is trading in the $18420s. A ~4.7% gain in five weeks. Thus, it pays to stay informed more often than once a month. We have since updated our understanding of the market’s price pattern and view the index as completing a final (grey) W-v of “the green W-5,” ideally at around $18700+/-100 via what is called in EWP-terms an ending diagonal (ED). See Figure 1 below.


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

The Dreaded Ending Diagonal

In a five-wave ending diagonal, the wave-structure is most often a 3-3-3-3-3 count as all five of the waves of an ending diagonal break down to only three waves each, indicating exhaustion of the larger degree trend. Also, Wave 1 and Wave 4 may overlap with each other. Most ending diagonals have a wedge shape to them where they fit within two converging lines.

The 3rd, 4th, and 5th waves often reach the 123.60%, 50.0-62.8%, and 161.80% Fibonacci extensions of W-1, measured from the W-2 low, respectively. In Figure 1 above, we can see that W-i, ii, iii, and iv thus far are all made up of three waves and that W-iii and W-iv topped and bottomed at the exact Fib-extensions. Lastly, W-iv overlapped with W-i, whereas the two grey converging lines thus far contain the price action. Thus, the price action is ticking off all the ED boxes.


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

When we assess the daily chart, see Figure 2 above, we find that the typical W-5 = W-1 relationship targets ~$18615, which is close to the $18800 Fib-based level shown in Figure 1. Besides, in Figure 2 we can see that the previous orange W-5 of green W-3 was longer than the orange W-1, thus we can allow for a bit of an extension.

Lastly, the colored dotted lines are the warning levels that will tell us if the uptrend is in jeopardy. The Bulls’ 1st warning is the blue level at $18,3000. The 2nd warning is the grey level at $18000, etc. This means that below the red warning level (the green W-4 low), the black W-4? is underway to ideally NDX15900+/-200. Lastly, please note that a break below the October 2023 low tells us the bull market is over.

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