NASDAQ $COMPQ $NDX Elliott Wave Update Aug 12, 2024
### NASDAQ Elliott Wave Update — August 12, 2024
The NASDAQ has shown remarkable resilience after hitting a low of 15,700, rallying 1,000 points to reach 16,720 as of today. This substantial recovery marks a significant turnaround and signals that the market may be in the early stages of a prolonged Wave 3, which is known for its sustained upward momentum in Elliott Wave theory.
#### The Recent Rally: Wave 1 to Wave 2 Transition
The recent 1,000-point rally from 15,700 to 16,720 is likely just the beginning of a more extended Wave 3 advance. Typically, Wave 3 is the longest and strongest of the impulse waves, characterized by powerful and sustained moves higher. In this scenario, the rally we’ve seen so far could be setting the stage for a much larger advance, potentially targeting the 17,400 level in the near term.
- **Wave 1 to Wave 2 Transition**: The initial move from the lows could be classified as Wave 1, with any minor pullbacks or consolidations representing Wave 2. If this pattern holds, the next move higher would be Wave 3, which has the potential to be a long and grinding upward trend.
#### Upside Targets: 17,400 to 17,500 Range
Looking ahead, the primary targets for the NASDAQ are in the 17,400 to 17,500 range. These levels are derived from key Fibonacci retracement and extension levels, which often act as critical points of resistance or support in Elliott Wave analysis.
- **17,400 Target**: This is the minimum target for the current Wave 3 advance. It represents a significant move higher from current levels and would indicate that the market is in a strong upward trend. Reaching this level would likely attract more buyers, further fueling the rally.
- **17,500 Target**: This level corresponds to the .786 Fibonacci retracement of the preceding C wave. A breakout above this level would not only confirm the strength of the Wave 3 advance but also set the stage for a potential challenge of the previous B wave high at 17,770.
#### Potential for a Long-Term Bottom
If the current rally marks a true bottom for the NASDAQ, we could see the index exceed the top of the B wave at 17,770 in the coming weeks. This would confirm that the market has moved past the corrective phase and is entering a new bullish cycle. The fact that the NASDAQ has already rallied 1,000 points off its lows suggests that this scenario is increasingly likely.
- **Exceeding 17,770**: Breaking above this level would signal a new all-time high for the NASDAQ and potentially lead to further gains as investor confidence grows. This would be a strong indication that the market has entered a new bullish phase, with the potential for continued upside over the longer term.
#### Risks and Considerations
While the outlook is positive, it’s essential to consider potential risks. The NASDAQ’s recent rally has been impressive, but markets rarely move in a straight line. Short-term corrections or consolidations are always possible, especially after such a significant move. Investors should keep an eye on key support levels, particularly around 16,500 and 16,200, which could provide buying opportunities if the market pulls back.
- **Key Support Levels**: Should the NASDAQ experience a pullback, maintaining support above these levels would be crucial for the bullish scenario to remain intact. A break below these levels could signal that the rally is losing momentum, potentially leading to a deeper correction.
#### Conclusion
The NASDAQ’s rally from 15,700 to 16,720 is a strong indicator that the market is in the early stages of a significant Wave 3 advance. With upside targets in the 17,400 to 17,500 range, and the potential to exceed the B wave high at 17,770, the outlook for the NASDAQ is increasingly bullish. Investors should be prepared for potential short-term pullbacks but can look forward to continued gains if the market maintains its current momentum.
