$COMPQ $NDX Elliott Wave Update 11:11AM PT — 1200 point rally from where we are?
Note: This is an AI Generated Article using Chat GPT
### Elliott Wave Update: NASDAQ ($COMPQ, $NDX) — 11:05 AM PT, August 5, 2024
The NASDAQ has shown remarkable resilience, rallying 750 points off its recent low. As we analyze the Elliott Wave patterns, the market’s next moves could be critical for traders and investors.
#### Recent Movement
- **Initial Rally**: NASDAQ surged from the intraday low of 15,700 to a peak of 16,450, completing what appears to be a Wave 1.
- **Wave 2 Correction**: A correction phase is anticipated, potentially retracing back to the 16,100 level, which has demonstrated strong support.
#### Elliott Wave Projection
Based on the Elliott Wave theory, the potential scenarios for the NASDAQ are as follows:
1. **Wave 2 Retracement**: If the current correction phase (Wave 2) follows the typical A = C pattern, it would pull back to around 16,100. This level is crucial as it serves as a strong support zone.
2. **Wave 3 Potential**: Should the market bounce from 16,100, a Wave 3 rally could ensue. Given the initial 750-point surge, a 1.618 extension move from the Wave 2 low could project an additional 1,200 points to the upside. This suggests potential targets in the 17,300 to 17,400 range.
#### Key Levels to Watch
- **16,100 Support**: This level is pivotal. If the NASDAQ retraces to this point and finds support, it could mark the start of a significant Wave 3 rally.
- **16,450 Resistance**: The peak of the initial rally (Wave 1) at 16,450 will act as resistance. Clearing this level would confirm the beginning of Wave 3.
- **17,300–17,400 Target**: If Wave 3 unfolds as projected, the NASDAQ could reach these levels, marking a substantial recovery from recent lows.
#### Market Sentiment and Indicators
- **VIX**: The Volatility Index (VIX) has been elevated, reflecting significant market fear and volatility. High VIX levels often precede market bottoms and subsequent rallies.
- **RSI**: The Relative Strength Index (RSI) remains in oversold territory, suggesting that the market has been excessively sold off and is due for a rebound.
#### Best-Case Scenario
- **Wave 3 Rally**: If the NASDAQ holds the 16,100 support level and begins a Wave 3 rally, it could quickly rise towards the 17,300 to 17,400 range. This move would represent a significant recovery, driven by oversold conditions and extreme market fear.
- **Positive Sentiment**: Clearing 16,450 would reinforce bullish sentiment, attracting more buyers and driving the market higher.
#### Worst-Case Scenario
- **Failed Support**: If the NASDAQ fails to hold the 16,100 support level, it could signal further downside risk.
- **Continued Volatility**: Persistent high VIX levels indicate ongoing market volatility, which could lead to more unpredictable price swings.
#### Conclusion
The NASDAQ’s recent 750-point rally from its low demonstrates potential for a significant recovery. If the market follows the Elliott Wave pattern, a retracement to 16,100 could set the stage for a powerful Wave 3 rally, targeting the 17,300 to 17,400 range.
Monitoring key levels and indicators will be crucial in the coming days. The VIX and RSI suggest the market is poised for a rebound, but traders should remain vigilant. Holding the 16,100 support level is essential for the bullish scenario to unfold.
