$COMPQ $NDX Late Night Elliott wave Update — Futures bounce 500
### NASDAQ $COMPQ and $NDX Late Night Elliott Wave Update: August 5, 2024
Note: This is an AI Generated article with Chat GPT
The NASDAQ futures market has experienced an exceptionally volatile session, with futures plummeting by as much as 1200 points, threatening to bring the NASDAQ Composite ($COMPQ) down to the 15,200 level. However, a remarkable rebound of nearly 500 points off the lows indicates that the market may yet find stability and potentially turn positive. This dramatic swing underscores the intense fear gripping the markets, as reflected by the Volatility Index (VIX), which opened at an extraordinary 41.80 — levels not seen in recent years.
#### Intense Market Fear
The opening VIX of 41.80 is a stark indicator of the extreme fear permeating the market. Such a high VIX reading is rare and typically signals panic selling. Historically, these elevated fear levels often precede market bottoms, as they reflect an overwhelming bearish sentiment where investors capitulate and sell en masse. This capitulation can create conditions ripe for a reversal, especially if the market perceives that the worst is over.
#### Elliott Wave Analysis
In the context of Elliott Wave theory, the recent market action suggests we are near the end of a significant corrective phase. The NASDAQ Composite has been tracing out a complex corrective pattern, with the potential for completing a zigzag formation (A-B-C) in the near term. The initial sharp drop followed by a substantial bounce fits well within the framework of an Elliott Wave correction, where Wave C often culminates in a sharp sell-off followed by a swift recovery.
#### Key Levels and Market Behavior
- **15,200 Level**: The plunge in futures put the 15,200 level within reach. This level represents a crucial support zone and could act as the bottom of the current Wave C.
- **16,125 Level**: This level, previously identified as a potential target for the end of Wave C (where Wave A equals Wave C), remains in play. The futures market’s rebound suggests that the initial test of this level may hold, providing a foundation for a broader market recovery.
#### Market Sentiment and Potential Reversal
If the NASDAQ futures manage to turn positive after such a steep decline, it would be a powerful indicator of a potential bottom. The combination of extreme fear, as evidenced by the VIX, and a significant rebound suggests that the market may be poised for a reversal. Such a scenario would align with historical patterns where extreme fear is followed by a period of relative stability and recovery.
#### Implications for Traders
For traders, the current environment offers both risk and opportunity. The extreme volatility presents opportunities for those able to navigate the swings and position themselves for a potential market rebound. Key technical levels, such as 15,200 and 16,125, will be crucial to watch. If these levels hold and the market begins to stabilize, it could signal the end of the current corrective phase and the beginning of a new upward trend.
#### Conclusion
The late-night session for NASDAQ futures has been marked by extraordinary volatility and fear, as evidenced by the VIX reaching 41.80. The market’s dramatic swings suggest we are nearing the end of a significant corrective phase in the Elliott Wave pattern. Key support levels around 15,200 and 16,125 are in focus, with the potential for a significant reversal if these levels hold. Traders should remain vigilant and prepared for swift market movements, as the current environment offers both significant risk and potential reward. If the futures manage to turn positive amid such extreme fear, it could mark the beginning of a new bullish phase for the NASDAQ.
