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We primarily use the Elliott Wave Principle (EWP) to forecast the financial markets, such as the NASDAQ100 (NDX). The EWP identifies the potential paths the market can take based on known patterns, which must adhere to price-based rules. Since we cannot predict the future, the EWP can help identify the path most likely to be followed. However, since financial markets are non-linear, stochastic, and probabilistic, we must, like any other forecasting discipline, always “anticipate, monitor, and adjust if necessary.” On Monday, August 5, the index bottomed out at $17435 and has rallied relentlessly, with only one down day, Wednesday, August 7. It is up almost 12% since that low. So, the question now is, “What’s in store for the markets next?” Since we track this index daily for our premium members, we must take a step back for our new readers here at FXStreet to clarify how we came to where we are now. See Figure 1 below. Figure 1. NDX daily chart with detailed EWP count and technical indicators Namely, earlier this month, we anticipated a low at “ideally the support zone at $18200-400. From there, the red W-b/ii back to ideally a 50-76.4% retracement of the red W-a/i must be anticipated: $19300-800.“ Last Monday, August 5, the index bottomed out at $17435, 4.2% below the ideal target zone. Thus, we got the direction right but the magnitude wrong. However, the index rallied from there as expected and is now trading in the $19470s. The red W-b/ii countertrend rally has reached the $19300-800 target zone, the 50-76.4% retracement of the red W-a/i. Moreover, the green W-c has also almost reached the 1.618x W-a extension at $19500, measured from the green W-b low. However, the green W-c doesn’t have to peak at that level and can easily extend to the…

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Filed under: News - @ August 15, 2024 10:19 pm