Nasdaq Update

Nasdaq Update. As on 30 May 2022. CMP 12,681. Posted at 2:55 pm.

We may not post any updates for the next day or 2.

Bottom line : Significant turn lower likely from 14,500 ~ 15,500.

Nasdaq pattern is crystal clear.  2 Important points to note :

• The 5 wave impulsive Decline from 16,764 to 11,492 is clear.  This points to at least another 5 waves down. But from where ?
• The sub-waves of the 5 wave decline gives us the clues we need.  The 5th wave was extended.  Within the 5th wave, the 5th sub-wave was also extended.  This was very helpful to turn bullish at the lows, as it meant a rapid (counter-trend) rally likely.

On 23 May, with the Nasdaq at 11,835 we said "At least another 5 wave down below the recent low of 11,492 is on the cards, but first a significant upward retrace (rally) is likely."

On 27 May, with the Nasdaq at 12,276 we said "This could mean a rapid rally to the 61% ~ 78% fibonacci retrace at 14,500 ~ 15,500, after which a subsequent sharp decline should follow."

The daily chart below shows the 5 wave decline, the sub-waves, fibonacci retrace levels, as well as three seperate 4th wave levels.

4th wave of 1 lower degree coincides with the 78% fibonacci retrace at 15,500.  This makes for one probable level for the NDX to turn lower.

4th wave of 2 lower degrees coincides with the 61.8% fibonacci retrace at 14,500.  This makes for the other probable level for NDX to turn lower.

So a rough approximation is for a turn lower at between these 2 levels. As soon as NDX crosses 14,500, this global rally has entered a zone of massive downside risk.

(The 4th wave of 3 lower degrees can be discarded as irrelevant as it is too short a retrace to hold any value).

Conclusion : With a major index like the Nasdaq helpfully providing such clear patterns, it would be truly unwise to ignore it.

Nasdaq Update. As on Fri 27 May 2022. CMP 12,276. Posted at 10:25 am.

Bottom line : 5 waves down on Nasdaq shows the larger trend is now down.  Nasdaq is clearly now in a bear market correction, which could see a strong rally.

Of all the indices we cover, the 5 wave impulse down on the Nasdaq is the clearest.  It is to be taken very seriously.

With the 5th wave being the largest wave, and within this 5th wave, the 5th sub-wave is also the largest.  This could mean a rapid rally to the 61% ~ 78% fibonacci retrace at 14,500 ~ 15,500, after which a subsequent sharp decline should follow.

Can Nasdaq turn down before the above levels ? Sure it can.  There is nothing fixed about the market.  The 61-78% fibo retrace is just a probable scenario.

Market Commentary. As on Mon 23 May 2022.

Discussion of co-relationships between Nasdaq, Nifty, and Bank Nifty.

Bottom line : Short term bullish and Intermediate term bearish.

Starting off with Nasdaq : There is a clear 5 wave impulse down from 16K to 11K.  We take this very seriously.  If companies like Alphabet (Google), Facebook, Microsoft etc are going to decline significantly, then it is most unlikely Indian companies and indices will be spared.  Moreover, the patterns on the indian indices are also relatively clear although there is no 5 wave impulse to the downside.

Nasdaq formed a 5 wave impulsive decline with the 5th wave as the largest wave.  Within the 5th wave, it’s own sub-divisions show the 5th wave was also extended.  This could mean a rapid rally in the Nasdaq back to the 61% – 78% fibonacci retrace at 14,500 ~ 15,500 levels, which also coincides with 4th wave of lower degree.  This makes it an important resistance level.  As long as Nasdaq does not exceed the all time high of 16,765, the 5 wave impulse remains an extremely important signal. 

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Bank Nifty : Since Nasdaq is the clearest of the major indices we have, a correlation with it would be a sensible way forward to deal with both Nifty & Bank Nifty.  Bank Nifty has 2 counts, both are short term bullish to at least 36-37K.  One of the counts calls for new all time highs above 42K.

2 seperate counts shown below.

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Nifty also has 2 options.  Both of which are short term bullish.  One of the options calls for a rally above 18,300.  See previous Nifty post for short term analysis.

2 seperate counts shown below.

Conclusion : With a major index like Nasdaq providing a clear signal, it would be unwise to ignore it.  At least another 5 wave down below the recent low of 11,492 is on the cards, but first a significant upward retrace (rally) is likely.