The most recent run up from Jan 5, 2024 to date can potentially drastically change the upside trajectory of Compq/QQQ/TQQQ on the short-term basis, if not the medium-term basis.
- Nasdaq run-of-the-mill EWA: www.tradingview.com/...
- QQQ upside trajectory (revision 0.0): www.tradingview.com/...
Back in July 2023 Compq produced a 1-2-3 intermediate rally with the 3-rd wave extended i.e. 3-rd = or > 1.618x the 1-st wave. Which then resulted into 90% probability Nasdaq would eventually produce a 1-2-3-4-5 intermediate rally with indicated statistical upside targets according to Mastering Elliott Wave by Glenn Neely.
Compq was the only major index with 90% statistical probability.
SnP500, Dow Jones and Russell2000 had whipsaw-maniacal 50/50 chances of rallying to new highers -or- collapsing (very) badly in July to November 2023; hence I had a very low confidence factor Nasdaq would be able to actually produce a 1-2-3-4-5 intermediate rally. Fortunately, my 50/50 EWA confidence factor was proven wrong.
- Nasdaq most probable EWA (weekly): www.tradingview.com/...
After finalizing the 4-th wave correction; Compq now has the above 5-th wave upside targets as specified in MEW when the 3-rd wave becomes longer than 1-st wave. There is a possibility of extended 5-th wave but a combination of extended 3-rd wave + extended 5-th wave seldom happens and thus a low probability at the moment.
After the 1-2-3-4-5 rally has completed; expect either an A-B-C intermediate correction of 10-20+% or a 1-2-3-4-5 vertical meltdown to happen with far bigger than 20% loss, with A-B-C corrective process the higher probability until proven otherwise.
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Uber-bullish view is that an extended rally above maximum allowance should result into the basic 1-2-3-4-5 pattern to morph into complex 9-waves -or- super-complex 13-waves rally that could more than double the maximum run-rate of the 1-2-3-4-5 rally from 56% toward 144% potential nominal gain if a 1-2-3-4-5-6-7-8-9 complex Spiral Meltup actually materializes. Super-complex 13-wave spiral meltup rallies very seldom happen and therefore the lowest probability.
- Compq bullish TA Indicators (daily): www.tradingview.com/...
- short-term uber-Bullish EWA: www.tradingview.com/...
- speculative 9-waves EWA (weekly): www.tradingview.com/...
In the near future Nasdaq should be able to rally as indicated above for the uber-bulls on the daily chart far exceeding the maximum extended 5-th wave allowance on the weekly chart. Hence, the probability of a complex 9-waves intermediate rally on the medium-term weekly chart will become much higher if the daily chart pattern comes into fruition.
Limiting factor is the Potential Divergence Sell Signal(s) on the weekly chart that should not trigger and be negated by the bullish TA signals on the daily chart w/in the next (few) weeks ahead if the uber-bullish view actually wins.
Obviously, if the weekly chart Divergence Sell Signal triggers; then that would be the very first biggest opportunity to go short in this ongoing 1-2-3-4-5 intermediate rally. Unfortunately for the uber-bears; DSS strategy works far less reliably compared to the very reliable Divergence Buy Signals on the daily as-well-as on weekly charts.
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Myself:
I received extra 66.67% unspent dividends last year. And am just waiting for an A-B-C correction to happen before deploying them to beef-up my portfolio.
- Yield Curve Inversions vs. Recessions: www.nasdaq.com/...
vs.
- SnP500 Strategic Plan A: www.tradingview.com/...
- Alternate Plan B: www.tradingview.com/...
- Alternate Plan C: www.tradingview.com/...
For the SnP500; the 5-th wave may or may not rally toward 50% to 79% upside potentials for the whole 1-2-3-4-5 intermediate rally. Flip side is of course the looming Economic Recession as 'predicted' by YC Inversion that could last a year or two, from October 2022, before a recession actually happens. SnP500 = bearish if YC inversion triggers a recession soon; bullish if the much anticipated recession got delayed or not happen at all within this year and/or next year.
With the most recent (very bullish) run up the past few weeks on short-term daily chart supported by TA indicators; the possibility of prolonged YC inversion goes higher and the probability to achieve the above Fibonacci upside targets went up considerably.
And based on Statistical Probability Analysis the usual intermediate rally range is 35% to 120% the past several decades hence the current crappy 38.68% performance of SnP500 from October 2022 intermediate bottom still has a very good chance the 5-th wave can become longer than 1-st wave and achieve the 50% average run rate of past 1-2-3-4-5 intermediate rallies. 79% potential cap gains is the maximum for this particular impulsive pattern if the 5-th wave actually becomes the longest and extended wave.
I specialized in EWA from 2003 to date = 20 years to 'divine' market directional movements and use TA + Fibonacci market-timing indicators as supplementary tools to fine-tune upside/downside targets. For those who might want to learn how to analyze markets deeply; the three (3) different types of 1-2-3-4-5 patterns and numerous different types of A-B-C corrective patterns are discussed extensively at Mastering Elliott Wave (MEW).
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That's it folks;
Statistical probability wise and due to most recent bullish TA indicators for the short-term daily chart; there are some more upside potentials for the 1-2-3-4-5 intermediate rallies of Compq and SnP500 that could result into much bigger upside potentials for Nasdaq if the basic 5-waves rally actually transforms into a complex 9-waves rally. Hence going short right now can be considered 'suicidal' if not a stupid mistake.
A better strategy is to wait for a Divergence Sell to trigger a sell signal in order to initiate a short position. That way limiting the potential upside losses to a minimum by using a DSS strategy with an SOP Hard Stop right at the most recent higher-high once the DSS triggers.
Another bearish case is of course if some (unpredictable) very bad or catastrophic news happens in the near future; then better take at least partial profits -or- go short immediately in expectation of 10-20+%, or much worse, sudden collapse of the Nasdaq/SnP500.
Cheers and Good Luck.
