Nasdaq – Road Map (open)
I rarely post daily Nasdaq Road Map updates, but today’s setup deserves attention.
Several technical angles are starting to point to the same concern, and the next move could help define whether Nasdaq is simply digesting recent gains or preparing for a more important short-term shift.
In this free Road Map update, I outline the key warning signals, review the most important technical levels, and discuss the possible paths for tonight and tomorrow.
The full assessment will be reserved for the weekly report over the weekend, available to subscribers.
Candlesticks and TA
The final 30 minutes of regular trading changed a lot.
The bullish candles QQQ had been forming on the 1-, 2-, 4-, and 12-hour frames transformed into bearish ones. Overall technical readings also placed the 4-hour combo directly in line with very similar technical formations previously seen on February 2 and November 5 (chart above).
The probability of the next sizeable red candle is now quite high. Be prepared.
Elliott Wave
At first glance, the first wave down (i or a) could be viewed as a bullish flag. However, there is also a possibility that this wave was a Leading Diagonal, and today’s sharp bounce indirectly supported that interpretation.
The biggest issue is the circled wave up, which does not appear impulsive. In an impulse, the middle section, wave 3, must not be the shortest and is typically the strongest part of the move. This structure clearly does not follow one of Elliott’s key rules.
If this hypothesis is correct, tomorrow we should see at least one more wave down. In the lucky path, that wave would find support somewhere in the red rectangle. If, however, the decline extends toward the blue area, it would open the door to building an impulse of a higher degree, increasing the odds of a larger correction.
Let’s see how it plays out tomorrow. We will discuss the mid-term perspective in the weekly report over the weekend.
