Nasdaq 100, Elliot Wave 5

TVC:NDX   納斯達克100
Price Action in Nasdaq 100 is showing up an ending diagonal pattern (Wave 5 of 3)

Typically ending diagonal moves in 3-3-3-3-3.

Currently we are in the last smaller motive higher of the 3. It looks like a throw over pattern as price broke upwards of the diagonal.

Currently pending short as we wait for the last C movement to exhaust. (Wait for a bearish candle).

評論: 6250 seems like a viable top side short.

Entering 1/2 position short at 6250.
評論: By Elliot Wave rules, Wave B-C (Wave 3), cannot be the shortest wave.

Therefore :
Wave 1 = 5896 - 5351 = 545
Wave 3 = 6010 - 5587 = 423
Wave 5 thus cannot exceed 423 points. - 5849 + 423 = 6272 points.

Our Stop loss will be set at 1.5% above 6272 to cater for volatility and slight errors in accuracy. Stop Loss will be set at 6370.
評論: We got a nice little red pin bar on the daily for yesterday, which reversed close to our maximum range allowed.

We should see a steep sell off in the next few days/weeks as price action accelerate downwards. Base on an ending diagonal, prices should swiftly retrace one degree more than the start of the pattern.

Enter my remaining 1/2 short at yesterday's close of 6248.
評論: Currently still holding short with SL set at 6370

I'm using futures to minimize carry cost

Since wave 3 can't be the shortest wave. I'm abit jittery about what is being played out. (Currently it looks like wave 3 is the shortest). Some other patterns could be at play. Nevertheless, since we have set our SL at 6370, we will see how it plays out.
評論: Day 7. its basically a waiting phase now.

I've went back to look at the chart and ruled that it cannot be an impulse, as wave 4 would have crossed into the territory of wave 1 (This is typical of identifying a diagonal as well).

I'm still quite peeved by the fact that wave 3 looks like the shortest wave. One explanation I could possibly get is to calculate is base on % terms instead of the absolute increase in points. This would stretch the current wave 5 to the maximum of the top put in on 7Nov, roughly an 8% increase in my calculations
評論: Day 8, Is the sell off finally upon us.. ? It came within 19 points to my SL.. -_-

If the selling continues, we might get a bearish extinguishing on the daily. But let's not get too excited yet. Need for a close below 6300 level for today's candle.

Go bears!!
評論: Yawn.. Patience is a virtue. Wait.
評論: Closing my short position, as wave 3 cannot be the shortest wave.

I think some other pattern might be in play.
I'm still in the trade. We might get a gap-down and trend-down day tomorrow. It's doable. The internals are average while the indices are within 1% of the ATHs.
melvinljw Teich50
@Teich50, I'm trading base on the EW pattern, since the rules are violated, I shall treat it as a failed trade. Simple. Move on.

+1 回覆
Trade Closed
I have been short too but took some profits during the dip today. NDX seems to be strong as it closed above 6300. It's been held up by mega-cap tech stocks such as AAPL and AMZN. My stops are above 6360s.
melvinljw Teich50
@Teich50, I'm more of a swing trader, so I don't do short trades. My holding period is typically a few weeks to months
+1 回覆
Teich50 melvinljw
@melvinljw, I'm a swing trader too where my holding period is weeks, but I trade in and out a bit to improve my cost basis.

Bears might be running out of time as stock markets tend to drift up slowly during the slow holiday seasons (like during the Thanksgiving week and Xmas week). I will let my stops do the talking.
I think NDX should not be able to make additional large gains as all the top tech companies' shares rose sharply already after they reported earnings in Oct and early Nov. They might just trade sideways in the absence of major news.
melvinljw Teich50
@Teich50, I'm not looking for sideways action. The chart pattern indicates a pretty steep sell-off in the next few weeks, if and only if the Ending Diagonal plays out
+1 回覆
Teich50 melvinljw
@melvinljw, Maybe I'm just impatient. NDX/NQ is still hanging at about 30 points below the ATH. The drop needs to happen this week as we go into holiday-trading mode (Thanksgiving) next week.
Like ur idea melvinljw any update ?
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