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.