NASDAQ Targets and Timing using Wyckoff
What if I told you that there is a method to project not only the targets for the next move in the NASDAQ100, but also the timing? In this post I will present my case for a likely move up, suggest where it will go, and provide a technique for identifying when the move is about to start.
First a request. If you find this useful, please hit the like button and follow me (hover your mouse over my profile picture). To get live updates (such as when I see that move starting to happen), please also follow the idea.
I recently posted an idea that provided targets for the NASDAQ100 based on the accumulation structure over the second half of May (see Related Ideas below). My Target #1 and Target #2 were hit, and as expected, the index is consolidating there. The higher targets from that post are shown as Target A3 (13,600-14,000) and Target A4 (14,080-14,480) on the above chart, relating to Structure A.
The current trading range, Structure B, could resolve as an accumulation. It is also possible (although, I believe, less likely) that the structure is distribution. In which case, my preliminary target is shown in red as Target BD1 (11,080-11,320), which would be a new low. It is possible that the count could grow with more consolidation, projecting lower targets. It is not possible to be sure of accumulation vs. distribution until the structure is more complete. However, the strength of the move yesterday was suggestive of accumulation. Today, we should find out and I will provide regular updates.
Using the Wyckoff P&F counting method, it is possible to get clues of when price will break out of a trading range. A breakout could happen when the count for the re-accumulation (Structure B) confirms a prior count for the original accumulation (Structure A). Because P&F counts are based on a combination of volatility and time, we can't project an actual time, but instead project the number of columns that must be completed. See the yellow lines on the chart. The first dotted yellow line relates to the lowest price in Target A3. The second dotted yellow line relates to the lowest price in Target A4. I will be looking for signs that a breakout is close, such as the ability to stay high in the trading range and with reducing volatility and spread. If the P&F columns are at one of these dotted lines when this happens, it is a clue that price may breakout soon. This is potentially a good point of entry.
If you have any questions, please feel free to ask. I will make updates later today.
First a request. If you find this useful, please hit the like button and follow me (hover your mouse over my profile picture). To get live updates (such as when I see that move starting to happen), please also follow the idea.
I recently posted an idea that provided targets for the NASDAQ100 based on the accumulation structure over the second half of May (see Related Ideas below). My Target #1 and Target #2 were hit, and as expected, the index is consolidating there. The higher targets from that post are shown as Target A3 (13,600-14,000) and Target A4 (14,080-14,480) on the above chart, relating to Structure A.
The current trading range, Structure B, could resolve as an accumulation. It is also possible (although, I believe, less likely) that the structure is distribution. In which case, my preliminary target is shown in red as Target BD1 (11,080-11,320), which would be a new low. It is possible that the count could grow with more consolidation, projecting lower targets. It is not possible to be sure of accumulation vs. distribution until the structure is more complete. However, the strength of the move yesterday was suggestive of accumulation. Today, we should find out and I will provide regular updates.
Using the Wyckoff P&F counting method, it is possible to get clues of when price will break out of a trading range. A breakout could happen when the count for the re-accumulation (Structure B) confirms a prior count for the original accumulation (Structure A). Because P&F counts are based on a combination of volatility and time, we can't project an actual time, but instead project the number of columns that must be completed. See the yellow lines on the chart. The first dotted yellow line relates to the lowest price in Target A3. The second dotted yellow line relates to the lowest price in Target A4. I will be looking for signs that a breakout is close, such as the ability to stay high in the trading range and with reducing volatility and spread. If the P&F columns are at one of these dotted lines when this happens, it is a clue that price may breakout soon. This is potentially a good point of entry.
If you have any questions, please feel free to ask. I will make updates later today.
Comment:
Pre-market thoughts...
The NASDAQ has moved up since Friday's close and is now pausing at an important level of resistance within the structure, where supply came in on three separate occasions. To maintain my bullish bias, I would like to see a test during the US session that does not go too deep, and then continues up (making a Wyckoff LPS). A failure down to the lows could flip the bias to distribution, bringing target BD1 into play.
Timing wise, a shallow dip (but of over 60 points) would produce a column of O's on the updated P&F chart below, and produce a confirming count to target A3. A couple more columns would confirm the higher A4 target.
The NASDAQ has moved up since Friday's close and is now pausing at an important level of resistance within the structure, where supply came in on three separate occasions. To maintain my bullish bias, I would like to see a test during the US session that does not go too deep, and then continues up (making a Wyckoff LPS). A failure down to the lows could flip the bias to distribution, bringing target BD1 into play.
Timing wise, a shallow dip (but of over 60 points) would produce a column of O's on the updated P&F chart below, and produce a confirming count to target A3. A couple more columns would confirm the higher A4 target.
Comment:
Pre-market thoughts...
Heavy supply came in yesterday and pushed price lower than I would like to have seen to remain bullish. Overnight, price dropped below support briefly. An apex has formed and price is currently below its bottom line, which could be acting as "ice" in the Wyckoff sense. A rejection here could confirm the bearish hypothesis.
The P&F timing count has been met, so if the NASDAQ is to break to the upside, now should be the time. I have a neutral bias now and got stopped out of my long position. No choice but to wait and see what happens today and tomorrow, especially given tomorrow's FOMC meeting.
Heavy supply came in yesterday and pushed price lower than I would like to have seen to remain bullish. Overnight, price dropped below support briefly. An apex has formed and price is currently below its bottom line, which could be acting as "ice" in the Wyckoff sense. A rejection here could confirm the bearish hypothesis.
The P&F timing count has been met, so if the NASDAQ is to break to the upside, now should be the time. I have a neutral bias now and got stopped out of my long position. No choice but to wait and see what happens today and tomorrow, especially given tomorrow's FOMC meeting.
Comment:
Distribution targets...
If the latest consolidation does confirm as distribution, then here are some preliminary targets:
Note that if/when price does break down, lower targets could be calculated. I have drawn in the potential "ice" line referenced in my previous comment.
If the latest consolidation does confirm as distribution, then here are some preliminary targets:
Note that if/when price does break down, lower targets could be calculated. I have drawn in the potential "ice" line referenced in my previous comment.
Comment:
Pre-market thoughts:
The NASDAQ broke above the potential ice. Price continues to hold in the range, and volume is reducing, suggesting absorption. The NASDAQ is currently the weakest of the US indices, and the others are starting to look distinctly bullish. I have updated the P&F chart with some accumulation targets. There is a confirming count for Target A3, which does extend into Target A4. It is very possible that a larger count to fully confirm Target A4 could be made later today.
What this means is that if accumulation is the bias, a move out of the trading range could very well happen today. However, in this volatile market, I am keeping my options open and will keep the distribution targets on the chart for now.
The NASDAQ broke above the potential ice. Price continues to hold in the range, and volume is reducing, suggesting absorption. The NASDAQ is currently the weakest of the US indices, and the others are starting to look distinctly bullish. I have updated the P&F chart with some accumulation targets. There is a confirming count for Target A3, which does extend into Target A4. It is very possible that a larger count to fully confirm Target A4 could be made later today.
What this means is that if accumulation is the bias, a move out of the trading range could very well happen today. However, in this volatile market, I am keeping my options open and will keep the distribution targets on the chart for now.
Comment:
Pre-market thoughts:
The trading range that keeps on giving...! The continued sideways movement in the market is building an even larger cause. As the chart below shows, there are now confirming counts for Target A3 and A4. Timing wise, price is ready to move!
A larger count is also shown, which would take price right up to the March high. One step at a time, but that is now something that we can start to consider, and if/when price moves up, we can look for confirming counts.
But, price still needs to confirm the bias with a Sign of Strength out of the trading range. For now, I'm continuing to keep the distribution targets on the chart - just in case.
The trading range that keeps on giving...! The continued sideways movement in the market is building an even larger cause. As the chart below shows, there are now confirming counts for Target A3 and A4. Timing wise, price is ready to move!
A larger count is also shown, which would take price right up to the March high. One step at a time, but that is now something that we can start to consider, and if/when price moves up, we can look for confirming counts.
But, price still needs to confirm the bias with a Sign of Strength out of the trading range. For now, I'm continuing to keep the distribution targets on the chart - just in case.
Comment:
Today's move confirmed that the trading range was distribution and demonstrates how we should always consider multiple scenarios. Now that the structure is complete, I have replaced the earlier preliminary distribution counts with a updated targets. The first has been met and price is very close to key resistance, so some consolidation soon is likely. What happens after that will be critical for the medium-term market outlook.
Comment:
Final update on this idea...
There was a small amount of consolidation in the first distribution target, but price has continued down. So, I have added lower targets.
The most important target is Target 2, which has now been met, because of the supply signature at the beginning and end of the P&F count line. It does seem that we might get some consolidation here. Can the NASDAQ create a cause to recover? There are lower targets...
This is the final update on this idea as it is getting long. If you found it useful, please subscribe to see new ideas.
There was a small amount of consolidation in the first distribution target, but price has continued down. So, I have added lower targets.
The most important target is Target 2, which has now been met, because of the supply signature at the beginning and end of the P&F count line. It does seem that we might get some consolidation here. Can the NASDAQ create a cause to recover? There are lower targets...
This is the final update on this idea as it is getting long. If you found it useful, please subscribe to see new ideas.
On the 1-hour bar chart, this looks very much like a Last Point of Support and a successful test in Wyckoff Accumulation Phase C. It would have been nice to have this confirmed with a commitment above 12,650, but we did not get that (as is often the case on a Friday). However, I did open a small position on the test, and the updated P&F chart below has been helpful with regard to timing.
We can see that the first dashed yellow line has not quite been met, but it will be touched on the next column. Technically we need a down-column (column of O's) to count from, which means two columns are needed as of the close. If today has been an LPS, a move up within the trading range on Monday would be expected, and an intra-day retracement of 60 points would provide that needed column of O's. That would be my next POE.