$COMPQ $TQQQ $NDX Elliott Wave 3PM Update — Ending diagonal soon?
### $COMPQ $NDX $TQQQ Elliott Wave Closing Bell Update — 3PM ET
The NASDAQ Composite Index ($COMPQ), NASDAQ-100 Index ($NDX), and ProShares UltraPro QQQ ($TQQQ) experienced significant volatility today, culminating in what appears to be the completion of a fifth wave down. This movement follows the Wave 4 up, which retraced exactly 38.2% of the preceding downward Wave 3, a classic Fibonacci retracement level.
### Wave Analysis and Market Movements
#### Wave 3 to Wave 4
The NASDAQ’s Wave 3 was characterized by a substantial decline, setting a bearish tone. Wave 4 then emerged, retracing 38.2% of Wave 3’s movement, reaching a key resistance level. This retracement, while offering a brief respite, was unable to sustain a bullish reversal, instead setting the stage for the next leg down.
#### Wave 5: The Final Downward Movement
Today’s market activity points to the NASDAQ entering a fifth wave down. This wave is often the final leg in an Elliott Wave cycle, marking the completion of a significant trend. The sharp decline we witnessed aligns with the characteristics of Wave 5, which often brings about the final phase of bearish momentum before a potential trend reversal.
### Ending Diagonal Pattern
In my analysis, the market may not experience a quick, violent reversal immediately following this fifth wave. Instead, we could see the formation of an ABCDE ending diagonal. This pattern is common in the final stages of a corrective wave, indicating a gradual slowing of momentum and often preceding a significant trend change.
1. **A Wave**: The initial drop within the ending diagonal.
2. **B Wave**: A corrective bounce.
3. **C Wave**: Another drop.
4. **D Wave**: A subsequent bounce.
5. **E Wave**: The final leg down.
Currently, we appear to be in the early stages of this ending diagonal, likely having completed Wave A and potentially Wave B. This suggests that Waves C, D, and E are still to come, which may result in mild downward pressure before a major bullish uptrend takes hold.
### Volatility Index (VIX) Insights
The VIX, which measures market volatility, nearly reached 30 today. This level of volatility is reminiscent of the extremes seen during the Wave 2 low set in early 2023. Such heightened volatility often signals that the market is approaching a significant bottom. High VIX levels typically correspond to market fear, which, paradoxically, can indicate that selling pressure is nearing exhaustion.
### Conclusion: Preparing for a Bullish Reversal
Given the current wave patterns and the elevated VIX, the market appears to be on the cusp of a substantial bottom. The completion of the ABCDE ending diagonal in the next day or two could set the stage for a significant bullish uptrend. Investors should watch for the final phases of this ending diagonal, as they could present strategic buying opportunities.
As we move forward, keeping a close eye on market developments and technical indicators will be crucial. The anticipated bullish reversal, if confirmed, could offer substantial gains for those positioned correctly. The NASDAQ’s recent activity, while challenging, may ultimately pave the way for a new, robust upward trend.
