If bearish Elliot waves are in play, Nasdaq forecast is -40%.
This is an extrapolated Elliot wave analysis which is based on the starting assumption that we have recently made wave 1 of the downtrend.
If for any reason this fails to be wave 1, that annuls the following trade plan. Alternatively, if this is wave 1, then this plan should map out the important swings for the next several months.
Elliot Wave Basics
Quick primer on some of the most important Elliot wave rules for those who do not know them.
The Elliot model theorises that markets will move in 5 main legs. 3 of these will advance the trend and two will correct the trend. The trend legs are odd numbers (1,2 and 5). Corrective legs are even numbers (2 and 4).
One of the most important rules of Elliot wave is wave 3 must not be the smallest (And typically it's about double of wave 1).
Wave 3
Wave 3 of a trend is the strongest and most consistent of the legs in a trend. And when we apply this to downtrends it predicts a crash like pattern (Stairs up and elevator down).
The wave 3 set up in a market (Up or down) is an epic opportunity. If you follow my work regularly you'll know my favourite thing to be doing is hunting for the wave 3 setups and it's because they're so lucrative. Not only can the market move a lot in your direction, it should not move too far against you. Allowing for aggressive trading.
Any time there's a possible wave 3 setup I can make a conditional trade plan and I know if I am right I am likely to make a lot of money and if I wrong I'll be able to work out it's not good quickly and make a nominal loss. There are various properties which make this so. Most notable the trending conditions of lower lows and lower highs.
If we head into this condition, then it should be fairly easy to make money following the downtrend until 13,000.
Here's a bit more nuanced version of the expected path (Because there are generally always some bounces).
Prepping to Hit the Lower Lows Trend
In wave 3 it's very 3 easy to make money if you know we're in wave 3. Otherwise, the market feels perpetually overbought/sold (up/down trend) and it feels like we must be close to bottom or top.
At this point in time it's too early to definitively say wave 3 is coming, but it's a good time to prep for it.
If we begin to sell again, it might be a much more substantive sell off.
If for any reason this fails to be wave 1, that annuls the following trade plan. Alternatively, if this is wave 1, then this plan should map out the important swings for the next several months.
Elliot Wave Basics
Quick primer on some of the most important Elliot wave rules for those who do not know them.
The Elliot model theorises that markets will move in 5 main legs. 3 of these will advance the trend and two will correct the trend. The trend legs are odd numbers (1,2 and 5). Corrective legs are even numbers (2 and 4).
One of the most important rules of Elliot wave is wave 3 must not be the smallest (And typically it's about double of wave 1).
Wave 3
Wave 3 of a trend is the strongest and most consistent of the legs in a trend. And when we apply this to downtrends it predicts a crash like pattern (Stairs up and elevator down).
The wave 3 set up in a market (Up or down) is an epic opportunity. If you follow my work regularly you'll know my favourite thing to be doing is hunting for the wave 3 setups and it's because they're so lucrative. Not only can the market move a lot in your direction, it should not move too far against you. Allowing for aggressive trading.
Any time there's a possible wave 3 setup I can make a conditional trade plan and I know if I am right I am likely to make a lot of money and if I wrong I'll be able to work out it's not good quickly and make a nominal loss. There are various properties which make this so. Most notable the trending conditions of lower lows and lower highs.
If we head into this condition, then it should be fairly easy to make money following the downtrend until 13,000.
Here's a bit more nuanced version of the expected path (Because there are generally always some bounces).
Prepping to Hit the Lower Lows Trend
In wave 3 it's very 3 easy to make money if you know we're in wave 3. Otherwise, the market feels perpetually overbought/sold (up/down trend) and it feels like we must be close to bottom or top.
At this point in time it's too early to definitively say wave 3 is coming, but it's a good time to prep for it.
If we begin to sell again, it might be a much more substantive sell off.
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