NASDAQ 100 Update: Is a 5% Correction Brewing?

Elliott Wave analysis successfully forecasted the NASDAQ100's recent price action, with the index closely following its Wave iii, -iv, -v pattern and reaching new all-time highs near the ideal target. The current third wave is now considered to have reached its upside target, and despite negative technical divergences, a brief ~5% pullback is anticipated before the broader uptrend resumes. The firm remains in the market, utilizing predefined warning levels to identify the onset of the next corrective phase (W-4).

Analysis

According to a technical analysis based on the Elliott Wave Principle, the NASDAQ 100 has successfully completed a significant third-wave advance, reaching a new all-time high of $22,915. This peak came within 0.78% of the forecasted target of approximately $23,095, following a previously mapped wave pattern that also accurately predicted the June 11 peak and June 23 bottom. While the primary uptrend remains intact, the analysis indicates this third wave is nearing exhaustion, supported by negative divergences on technical indicators such as the RSI, MACD, and Money Flow. Consequently, a corrective fourth-wave pullback of approximately 5% is now anticipated before the broader uptrend resumes. The firm is maintaining its long exposure but is closely monitoring a series of predefined price-based warning levels—specifically $22,733, $22,587, and $22,386—to signal the start of this corrective phase, indicating a disciplined approach to risk management rather than attempting to predict the exact top.

Key Decisions for Investors

• Investors should anticipate increased near-term volatility and a potential pullback of approximately 5% in the NASDAQ 100, as technical indicators suggest the current upward impulse wave is nearing completion.
• Traders holding long positions should closely monitor the key price levels of $22,733 and $22,587 as early warnings, with a break below $22,386 serving as a stronger, price-based signal that the expected corrective phase has commenced.
• For those with a longer-term bullish outlook, the projected pullback could present a tactical opportunity to accumulate or add to positions, given the analysis suggests the primary uptrend will resume after the correction.