Has Nasdaq 100’s Retreat Come To A Close?

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As opposed to adhering strictly to a Fibonacci-based impulse pattern, the NDX decided to expand its waves slightly.

In Donald Rumsfeld’s terms, this was a “known unknown.” Specifically, the index bottomed out on Thursday at $10784 – 1.1% lower than our ideal pattern forecast foretold last week.

According to the daily chart, they kept tabs on five sub-waves of red W-c and black W-b the previous week. These patterns stem from a flat correction in which an internal structure of three components is known as a 3-3-5 pattern

The green wave bottoms at $10967 (compared to the estimated range between $11100 +/- 100). Wednesday’s high was followed by green wave four before finally hitting bottom with green wave 5.

Over the past few weeks, a W-5 of W-c of W-b should take us to approximately $11000 +/- 100.

The central belief is that this will be followed by an even bigger rally (black W-c) to reach $13.4+/-0.5K and finish the blue wave B. 

The index will need to go below the orange dotted horizontal line at $10,800 and red at $10,700 for it not to happen, in which case bulls must be alert. Although prices went as low as 10800, all appears good, but caution must be taken.

The S&P 500 and the Nasdaq were heading for their most significant one-day percentage advances observed in a month. 

It’s nice to see green on the screen,” said Chief Equity Strategist at US Bank Wealth Management in Minneapolis, Terry Sandven. “Stocks are trending higher as investors look to put a wrap on 2022 while approaching 2023 with a renewed sense of optimism.

The much-anticipated Santa Rally, which encompasses the final five trading days of December and the opening two in January, is almost upon us. Since US stock markets will be closed on 12/26 and 01/02 due to Christmas and New Year holidays, respectively, traders should seize this opportunity beginning Friday till January 4th. 

Furthermore, current sentiment in the market is heavily Bearish, along with an Elliott Wave Principle count seen over previous weeks. These signals do indicate that a sustained bottom could be near.

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