NASDAQ 100: Failed bull or fake bear? The decision is near

The NASDAQ 100 bulls regained control again this week. Better-than-expected third-quarter earnings, a war in the Middle East that has not yet fully escalated, and a robust economy (the Godot recession does not materialize) drove the market higher at the beginning of the week.

Two channels hold - the consolidation channel and the bull one

The consolidation channel formed since the end of July has remained intact and could not be broken to the upside. The bulls tried for a second time but failed as of writing this analysis (pre-market 18 October).

The bears could not build on the downside momentum

But the bears could not build on the downside momentum from late last week either. It must be noted that the steep upward channel formed since the beginning of 2023 was broken in October. The more moderate bull channel, though, is still untouched.

The bullish 5-wave count

I still stick with the bullish 5-wave count and think we are in a consolidation wave 4. We are either in Wave E, moving the market down to the lower trend channel line, or in the early stages of the final impulse Wave 5.

Let's call it a draw.

Looking at a shorter time interval, we can see that we have made three waves up since late September. We are now either in the first leg of Wave E or the fourth Wave of the initial Wave up, which is the start of the impulse Wave 5.

On the way to ATHs?

In the latter case, we will shortly break the consolidation channel and move closer towards ATHs. In the former case, we will move south to the lower consolidation channel trend line.

It is all about the mag-7 stupid!

The mag-7 companies will report earnings from today until the end of October. If they show that the earnings recession is over, the market may move considerably higher. If they show the opposite, the market may crater. If they show something in between, the market may do whatever it likes :-).

After all, Elliot Wave analysis is an art rather than an exact science.

#nasdaq100 #nasdaq #sp500

SPY is in bullish territory as well, and R2K a completely different picture

A similar count backs the bullish NASDAQ 100 count for the SPY. It is essential that the highs around 418 hold as support.

There is no impulse wave count for the R2K. We may see a medium-term bottom, though.