$COMPQ $TQQQ $QQQ Elliott Wave Update July 31, 2024 — Huge upside reversal
### NASDAQ Elliott Wave Pre-Market Update — July 31, 2024
As of 6 AM ET on July 31, 2024, the NASDAQ futures are indicating a robust pre-market rally, with an increase of over 420 points. This surge is noteworthy, potentially setting the stage for a significant market movement as the trading day begins. In this Elliott Wave analysis, we explore the implications of this pre-market activity and outline key levels to watch as the market opens and progresses.
#### Current Market Position and Key Levels
1. **Clearing the 5th Wave Drop**: If the NASDAQ opens around the current futures levels, it would effectively retrace the entire 5th wave drop, positioning the index to clear 19,220. This level is crucial as it represents the 100% retracement of the last down wave, suggesting a potential end to the recent correction phase.
2. **.786 Fibonacci Resistance at 19,650**: The next critical resistance level to watch is around 19,650, representing the .786 Fibonacci retracement level from the recent high. This level is a key barrier; a breakout above it would signal strong bullish momentum and potentially confirm a bottoming process. Given the magnitude of the overnight rally and the upcoming Federal Reserve meeting, there is a plausible scenario where this resistance could be tested and possibly breached today.
3. **Technical Indicators Signaling a Bottom**: Several technical indicators support the notion of a potential bottom:
— **Completed Zigzags in NASDAQ and SPX**: Both indices have completed their respective zigzag correction patterns, often a precursor to a reversal in trend.
— **VIX Near 20**: The CBOE Volatility Index (VIX) near 20 suggests a relatively low level of market fear, often associated with market bottoms or periods of stability.
— **Stochastic Oscillator**: The slow and fast stochastic indicators are near the oversold region (0–20), indicating that the market may be poised for a reversal.
— **RSI Levels**: The Relative Strength Index (RSI) is currently at 32.60, close to the previous low of 32.10 during the last Wave 2 correction. This level suggests that the market is nearing oversold conditions, which often precedes a rally.
#### Potential Impact of the Federal Reserve Meeting
Today’s Federal Reserve meeting adds another layer of complexity and potential volatility. The market’s reaction to the Fed’s announcements, particularly regarding interest rates and economic outlook, will be critical. A dovish stance or reassuring commentary could provide the catalyst needed to break through the 19,650 resistance level, confirming a market bottom and potentially sparking a new bullish wave.
#### Conclusion
The NASDAQ’s pre-market rally sets an optimistic tone for the day’s trading, with significant technical levels in play. Clearing the 19,220 level and subsequently challenging the 19,650 resistance could mark the end of the current corrective phase and the beginning of a new upward trend. However, traders should remain cautious and attentive to the Federal Reserve’s meeting outcomes, as these will significantly influence market direction.
As always, while Elliott Wave analysis provides a framework for understanding potential market moves, it is crucial to incorporate other technical and fundamental analyses to make informed trading decisions. Today’s session could be pivotal, offering opportunities for those prepared to navigate the volatility.
