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Sunday, July 26, 2009

The NASDAQ Count


The NASDAQ is achieving wonderfully some very satisfying Fibonacci retraces for Primary Wave [2]. It has surpassed the 38% retrace mark. At 2066 (still a ways to go!) it will have achieved a 50% retrace.

At 2150 lies a resistance zone that will be hard-pressed to penetrate.

Yes the NASDAQ seems to lead this bear market in its rallies but then again, people are enamored with these stocks like Apple, Google and what not. After all, they are flush with cash! On the other hand, the NASDAQ will also likely be the canary in the coal mine and when it reaches an impenetrable resistance layer, it will likely flash weakening signals to the P2 rally as a whole. So far it hasn't been stopped.

I might add that the whole thing looks like one gigantic rising wedge. This P2 rally never had a 38% retrace down (and I don't think it will - P2 should top without ever having a 38% retrace). Its never been tested. It seems to be in a hurry to get what it can when it can.

I must say, technically P2 will look bullish. The NASDAQ is starting to flatten out and turn upwards its 200DMA, which will happen to some degree. The SPX is not far behind. Some technical things will happen that will proclaim a lot of people to turn bullish. It will then remain to be seen if this can translate into more price rises through maga-resistance layers.

I do not portend that my rally count thesis must be perfectly correct. There is room for other interpretations. I however am still confident that that's all it is: a bear market rally, albeit the greatest just about in the history of the stock market. The subsequent drop will also make history. That is the theory. A Primary Wave 3 in a cycle wave c down is supposed to be the baddest-ass wave of them all.

Many hard-core bears are no longer believing that to be the case. Persistent price rises will do that.

6 comments:

  1. Great work. I think you are spot on. Question, what is a cycle wave c down? Would this be considered 3 of 3 of 5? Thanks

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  2. Dan, one other question. What is the difference in an ABC pattern (lets sat for the coming down move) opposed to 1-5 for P3.
    Thanks again

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  3. dano,

    do you ever chart or count the $NDX?
    Its long/intermediate term actually MUCH more bullish than the $COMP

    just curious.

    http://erikmarketview.blogspot.com/2009/07/index-numbers-to-watch-ndx-is-leader.html

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  4. Sure I do. Its always bullish heh.

    Its the focus of asset mania. Its where Joe Q . Public puts his rally cash.

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  5. ur NDX count/chart any differant from your COMP?

    the ndx chart is actually more differant than the COMP from what one might think it would be

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  6. I have 1276-ABCD (then Y is (a) of a simple abc/E 1978 complete. I've seen this correction pattern before in SPX where ABCD develops and E is capped with a simple abc...

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