Trading update on NASDAQ 100

8 hours ago

MEGA Cycle ended?

Greetings, traders!

The markets are at a critical juncture, and it's essential to prepare for what could be a significant correction in the NASDAQ 100 and, by extension, the broader stock market. Here's my analysis and outlook based on current price action, key levels, and technical indicators.

Potential for a 21% Decline in the NASDAQ 100

As I highlighted in the attached daily and weekly charts:

Elliott Wave Analysis:
The NASDAQ has completed its five-wave impulsive structure, signaling the potential end of a major bullish cycle. We are now in the midst of a corrective phase, which appears to be unfolding in the form of an ABC correction. This correction suggests that Wave C, the final leg down, is still in progress, with room for further downside.

Break of Structure (BOS):
A Break of Structure has occurred, confirming the bearish sentiment. Coupled with the presence of an unfilled gap overhead, it's clear that sellers are currently in control.

Key Fibonacci Levels:
The 0.618 Fibonacci retracement at 16,210 is a critical level to watch. A break below this support could open the door for a more extended drop to the 0.75 retracement at 13,200, representing a 21% decline from current levels.

Trendline at Risk:
The ascending trendline that has supported the NASDAQ since its 2022 lows is being tested. If this trendline breaks, it will likely trigger a cascade of selling pressure, accelerating the move to our projected downside targets.

Broader Market Implications
The NASDAQ often serves as a barometer for risk appetite in the financial markets. A sharp decline here could have ripple effects across other indices and sectors, particularly tech-heavy and growth-focused stocks. Watch for potential spillovers into the S&P 500 and Dow Jones Industrial Average, which could amplify market-wide volatility.

Key Levels to Watch

Resistance:

Gap area near 21,600–21,800.

This zone is likely to act as a supply area if the market attempts any retracement.
Support:

16,210 (0.618 retracement) – Initial target and a potential temporary bounce zone.
13,200 (0.75 retracement) – Ultimate target if bearish momentum persists.

Trading Strategy
For traders looking to capitalize on this potential move:

Short Positions:

Consider shorting retracements into resistance zones like the gap area or the 0.25 Fibonacci level.

Use 16,210 as a primary profit target, with a portion of the trade left to run toward 13,200 if bearish momentum accelerates.

Risk Management:

The markets remain volatile, so ensure you have clear stop-losses in place to protect against unexpected reversals.

Watch for Confirmations:

Monitor volume spikes, candlestick patterns (e.g., bearish engulfing), and breaks of key levels like the ascending trendline for additional entry confirmations.

Final Thoughts
The NASDAQ and broader markets are entering a critical phase. While the correction presents risks, it also provides opportunities for traders and investors who stay vigilant and disciplined.

Remember, patience and preparation are key to navigating volatile markets like these.

Stay sharp, stay informed, and trade smart.

Lord MEDZ

8 hours ago

Note