Feb 5 NASDAQ Elliott Wave Short Term/Mid Term Update

Mid-Term and Short-Term Elliott Wave Update for NASDAQ — February 3, 2025

The NASDAQ has been in a volatile yet structurally significant Elliott Wave cycle over the past few months. After reaching a high of 20,204, the index experienced a corrective Wave 4 decline to 18,880, marking a precise 0.382 Fibonacci retracement of the rally from 16,650 to 20,204. While this retracement aligns with classic Wave 4 behavior, the subsequent price action has been notably erratic, making short-term wave counts challenging.

Mid-Term AnalysisSince the 18,880 low, the market has spent nearly two months in a complex and choppy formation, characterized by three zigzags and a continued lack of directional clarity. Despite these fluctuations, a key structural requirement for a bullish continuation remains intact: NASDAQ needs to clear 20,200 decisively. A sustained move beyond this level would likely confirm that Wave 4 has ended, setting up a Wave 5 of 3 that targets 20,450.

Short-Term ProjectionFrom a shorter-term perspective, the 20,450 level is an important Fibonacci projection, aligning with the common Elliott Wave guideline where Wave 1 = Wave 5 within a larger third wave. This makes 20,450 a highly probable target if NASDAQ can break through 20,200 in the coming days or weeks.

However, should 20,450 act as a major resistance level, a corrective pullback would become more likely. In that scenario, NASDAQ may need to retest the 18,800 zone before attempting another breakout. This level has already served as a strong support area during the Wave 4 retracement, making it a critical line in the sand for bulls.

Market Implications & StrategyTraders should keep a close eye on the 20,200 resistance zone in the short term. A clean break and hold above this level could signal an acceleration towards 20,450, completing the expected fifth wave within Wave 3. If 20,450 is rejected, profit-taking and a potential pullback to 18,800 should be anticipated before another leg higher.

For those managing positions:

A break above 20,200 could warrant adding to long positions, targeting 20,450.

Failure to hold 20,200 could lead to short-term choppiness, potentially bringing another test of 18,800.

A deeper pullback below 18,800 would suggest the need to reassess the overall wave count.

Final Thoughts :

The NASDAQ remains in an overall bullish structure, but short-term volatility has made wave counting more difficult. The key levels remain 20,200 (breakout confirmation) and 20,450 (Wave 5 target), with 18,800 acting as major support. The coming days and weeks will be crucial in determining whether the index resumes its rally or enters a more prolonged corrective phase.

As always, traders should combine Elliott Wave analysis with other technical indicators, such as volume and momentum, to confirm breakout signals and avoid false moves. Patience and disciplined risk management remain key in navigating this unpredictable market phase.