The Elliott Wave Principle Unveiled
Delving into the murky waters of market forecasting, practitioners turn to the Elliott Wave Principle (EWP) to unlock potential pathways for the financial horizon. Through this lens, the NASDAQ 100 (NDX) is scrutinized for its adherence to discernable patterns etched in the annals of market history. Mind you, Buoyed by certain price-based axioms, we engage in a perpetual ballet of “anticipate, monitor, and adjust if necessary.”
Meteors and Magnitudes: The Market Dance
A recent soiree embarked upon a quest to scale the zenith, fixating on the illustrious 200.0% extension level at $20665+/-50. The NDX, with a parabolic flourish, momentarily embraced $20690 on July 10. Alas, the celestial dance quickly shifted as the NDX slipped over 15% by a somber Monday’s dawn. A premonition shared, prophetically:
“A move below Monday’s low will confirm the green W-5 of the larger red W-a/I [to ideally the support zone at $18200-400]. From there, the red W-b/ii back to ideally a 50-76.4% retracement of the red W-a/i must be anticipated: $19300-800.“
An ominous August 5 unfurled, unveiling a jarring nadir at $17435, slightly askew from the ideal destination. Our directional compass was calibrated accurately, albeit the magnitude misaligned. Yet, as foreseen, a resurrective rally commenced, leading the NDX to flirt with the $19420s, in accordance with Figure 1’s snapshot. Tallying our scorecard, a respectable 2.5 out of 3 over bygone weeks. Yet, as the horizon beckons, we ponder, “What next for the markets?”
Market Canvas: An Artistry in Motion
The red W-b/ii symphony has crescendoed within the $19300-800 threshold, the melodic 50-76.4% retracement of the red W-a/i. Even the green W-c has languidly approached the 1.618x W-a extension, nestled at $19500, measured from its green W-b nadir. Still, the green W-c’s ascent isn’t bound by earthly shackles, capable of leaping towards the $19800 empyrean.
Ruminating, we raise the Bulls’ colored flags, signaling thresholds beyond which the prospect of skyward journey dims. A caveat lingers: the red W-b/ii drama might evolve into a protracted opus, with the current rally a potential prelude to W-a of W-b/ii. A tale deferred for another moon, a mere whisper in the wind.
Riding the Waves: The Market Symphony
Last week’s plunge painted a chiaroscuro on the canvas, suggesting a corrective triad’s descent. Picture the red W-a, b, and c in Figure 2’s vignette, each stroke delineating a tale. A trifecta of waves ebbing is oft the telltale sign of corrective choreography. Thus, we may witness a fresh impulse crescendo, an overture of green waves 1-2 -3-4 -5, heralding soaring crescendos, perhaps cresting towards unseen apices.
In this opus, the green W-3 shall conclude, paving the pathway for a verdant W-4 and 5. Ideally, the former must maintain chords above $18700, to allow the latter to croon near $19950+/-50. Still, counting five grander waves unfurling from the crucial October 2022 nadir to July’s zenith, as expounded in our forthcoming thesis, we wade with cautious optimism. A narrative adrift for now, a saga held in abeyance.
