Nasdaq reversal targets the January low
With the breakout today, the Nasdaq has confirmed a Wyckoff accumulation structure that started 19th May. The above chart provides my Wyckoff P&F targets, starting with the most conservative and getting successfully more aggressive. Note that the final higher target has not yet been taken. I will add this after the Wyckoff Backup event has occurred, which is a test of the breakout of the structure (bounded by the blue lines).
Not all targets need be met. At each, we need to be on the lookout for the price advance to pause and create a steppingstone structure. That could create a cause for a continued move up, or it may create a cause for a move down. We need to read the chart at each stage.
The most conservative target has been met, and price has already paused at it. I am not expecting much of a Backup, given current market conditions and the potential for more of a short squeeze. A small retracement on Friday and then rapid advance is more likely. A good entry would be on the reversal of this retracement.
I will update this post with my thoughts on the price advance. If you have found this useful please give a thumbs up and a follow to keep updated. Thanks!
Not all targets need be met. At each, we need to be on the lookout for the price advance to pause and create a steppingstone structure. That could create a cause for a continued move up, or it may create a cause for a move down. We need to read the chart at each stage.
The most conservative target has been met, and price has already paused at it. I am not expecting much of a Backup, given current market conditions and the potential for more of a short squeeze. A small retracement on Friday and then rapid advance is more likely. A good entry would be on the reversal of this retracement.
I will update this post with my thoughts on the price advance. If you have found this useful please give a thumbs up and a follow to keep updated. Thanks!
Comment:
Looks like that TR was accumulation. The chart below shows two targets. The first has just been met and price is reacting. The second takes price up to the early may lows, close to Target #2 from the larger accumulation and confirming it. That might be all we get. We'll need to see.
Comment:
Intraday update: The advance has paused just two boxes under the target zone for the re-accumulation. This is at a level of resistance from the 17 May high. I would expect a new cause needs to be built here before price can break above resistance, but the main structure from 19 May still has a lot of fuel in the tank. My money is on a continued move up into the Target #2 area, but this may come after the holiday. Barring any macro news shocks, of course.
Comment:
On Friday, Target #2 from the 1-hr P&F chart was hit. Let's take a step back and review the 1-hour P&F chart (see below).
I have added Target #4, using the full count from the Selling Climax to the Last Point of Support. This goes to 14,080-14,480, above the January low and to the top of the down-channel taken from the 27 December high. That would seem a perfect place for the rally to end, or at the very least, to build a new cause for a continued move up.
For now, the NASDAQ is forming a small trading range in the Target #2 zone in an area of resistance. Given the higher targets, there's a good chance that this will be a re-accumulation and, one I have confirmed that bias, I will be looking for a good point of entry to add to my position.
I have added Target #4, using the full count from the Selling Climax to the Last Point of Support. This goes to 14,080-14,480, above the January low and to the top of the down-channel taken from the 27 December high. That would seem a perfect place for the rally to end, or at the very least, to build a new cause for a continued move up.
For now, the NASDAQ is forming a small trading range in the Target #2 zone in an area of resistance. Given the higher targets, there's a good chance that this will be a re-accumulation and, one I have confirmed that bias, I will be looking for a good point of entry to add to my position.
Comment:
Pre-market thoughts for today...
The NASDAQ (like other US indices) are in a trading range, between my first two targets, at important resistance. This will most likely last last 1-3 days. Many participants are bearish and expect a failure here. Given that we have only used a small part of the "fuel in the tank" from the reversal, and because demand is visible, I'm expecting this to be an accumulation. It would not surprise me to have a shakeout over the course of the trading range, where the Composite Operator can take advantage of the bearish weak hands and relieve them of some of their stock.
Perhaps we will get something like the blue line in the chart below (just a very approximate projection based on a standard Wyckoff accumulation structure). My next point of entry will be on confirmation of the spring/shakeout.
The NASDAQ (like other US indices) are in a trading range, between my first two targets, at important resistance. This will most likely last last 1-3 days. Many participants are bearish and expect a failure here. Given that we have only used a small part of the "fuel in the tank" from the reversal, and because demand is visible, I'm expecting this to be an accumulation. It would not surprise me to have a shakeout over the course of the trading range, where the Composite Operator can take advantage of the bearish weak hands and relieve them of some of their stock.
Perhaps we will get something like the blue line in the chart below (just a very approximate projection based on a standard Wyckoff accumulation structure). My next point of entry will be on confirmation of the spring/shakeout.
Comment:
Administrative note: Even though this idea is ongoing, the thread of updates is getting long. I will continue with updates by posting a new idea.
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Update on the chart as of this morning... The chart below is the same as above but with more detail on the last 24 hours (it is 5minute, 5 point scaling, 3 box reversal). It shows the trading range that has formed at Target #1. Our job today is to work out whether this is accumulation or distribution. It is too early to say, but I have added some targets for the distribution case, ignoring the low-volume overnight session. It targets around 12,140, which would make for a perfect Wyckoff backup to the larger accumulation structure shown in the main chart.
If price moves down today and stops at this level, it could be a good long entry. Risky over the holiday weekend, of course. But that's how the Composite Operator works...
On the other hand, we could get a move up, in which case Target #2 is in play.