Nasdaq 100 Elliott Wave Update: 26700 Here We Come

The NASDAQ 100 (NDX), analyzed through the Elliott Wave Principle, bottomed on October 14 and is currently in a 5th wave, targeting approximately 26680. This long-standing target, once achieved, is projected to significantly increase the probability of a substantial market correction, potentially mirroring the 2022 bear market. The index has recently made new all-time highs, progressing towards this anticipated peak.

Analysis

The NASDAQ 100 (NDX) is currently positioned in its fifth Elliott Wave, having bottomed out on October 14 at 24256 following a shallower-than-anticipated fourth-wave pullback. The index has since advanced to new all-time highs, progressing towards a long-standing technical target of approximately 26680. This target is reinforced by a 5=1 wave extension calculation, projecting 26640.

Upon reaching the 26680 target, the probability of a significant market correction, potentially mirroring the 2022 bear market, is expected to increase substantially. This outlook suggests a critical inflection point for the NDX, transitioning from its current impulse move to a period of heightened downside risk. The analysis emphasizes that in bull markets, "downside disappoints," explaining the less severe recent pullback.

Specific warning levels have been established to monitor the sustainability of the current fifth wave. For the daily chart's green W-5, a move below 25864 indicates a 25% chance of its completion, while a drop to 24652 signals its definitive end. Intermediate-term weekly chart levels for W-3 also provide thresholds, with 25656 marking a 25% chance of W-3 completion and 22673 indicating its definitive conclusion.

Key Decisions for Investors

• Investors should closely monitor the NDX's approach to the 26680 target, as its attainment significantly increases the likelihood of a substantial market correction.
• It is prudent to track the specified daily and weekly warning levels (e.g., 25864, 24652 for W-5; 25656, 22673 for W-3) to gauge the potential completion of the current uptrend and manage exposure.
• Consider re-evaluating portfolio allocations and risk exposure as the NDX nears its projected peak, given the increased probability of a 2022-like bear market scenario.