According to EWP analysis, the ideal target for W-3 is $11100 +/- 100, and W-4 should bounce back to around $11500+/-100 before W-5 takes hold and reaches $11000 +/- 100. These target zones are based on standard Fibonacci-based extensions and retrace, but it's important to note that the market may deviate from this pattern.
As previously mentioned, the Nasdaq 100 did not follow an ideal Fibonacci-based impulse pattern but rather extended its waves slightly. On Thursday, the index bottomed at $10784, which is only 1.1% below the W-5 target zone of this ideal pattern forecasted last week.
In the daily chart above, the five sub-waves of the red W-c of black W-b can be seen. The internal structure of a flat is a-b-c, which is a 3-3-5 pattern. The green W-3 bottomed at $10967 (compared to the forecasted $11100 +/- 100). Wednesday's high was green W-4, and green W-5 has likely bottomed.
According to the previous analysis, W-5 of W-c of W-b should take the index to $11000 +/- 100. The next significant rally, black W-c, is expected to bring the index to $13.4+-/-0.5K to complete the blue W-B. However, for this primary focus to play out, the index must hold Thursday's low and not break below $10,700 on a daily closing basis, break back above the green W-4 high made this week ($11286), and break above $11650, followed by the December 13 high. If the index fails to follow these steps and drops below Thursday's low, the primary expectation will be invalidated, and the stock market will likely head for $9000 instead.
Nasdaq 100: Potential for a Sustained Bottom
The famous Santa Rally, which occurred during the last five trading days in December and the first two trading days in January, may suggest that a sustained bottom for the Nasdaq 100 is close. This is because sentiment is currently exceptionally bearish, and when combined with the Elliott Wave Principle (EWP) count that has been tracked over the last few weeks, a bottom could be imminent.
It's important to note that the US stock markets will be closed on 12/26 and 01/02 in observance of Christmas and New Year, so the window of opportunity for a Santa Rally will officially open on Friday and end on January 4.
According to EWP analysis, the Nasdaq 100 has recently shown a zigzag+flat pattern, which has resulted in an overall larger flat (black) W-b. Currently, the pattern suggests that the index is tracking five waves lower, as flat corrections typically end in five waves. The ideal target for W-3 is $11100 +/- 100, and W-4 should bounce back to around $11500+/-100 before W-5 takes hold and reaches $11000 +/- 100. These target zones are based on standard Fibonacci-based extensions and retrace, but it's important to note that the market may deviate from this pattern.
