Nasdaq – Weekly Analysis

Last week, I warned that “the weekly RSI has now reached levels last seen in February 2020, just before the famous 30% plunge in a matter of weeks. The previous comparable signal occurred in 2018 and also led to double-digit losses.” On Friday, June 5, 2026, that warning materialized into a powerful market event, with roughly $2 trillion erased from the U.S. market in a single session.

In this analysis, we examine Nasdaq’s latest structure, momentum, and probability map to assess the next possible moves.

CANDLES & TA:

The Nasdaq selloff on Friday was of extreme significance. In one day, the majority of daily indicators flipped bearish. Strong bearish signals reached the 9-day frame, and momentum increased meaningfully.

The next checkpoint is Tuesday, with the 10-day frame closure. If Nasdaq does not reverse the odds by then, the 10D frame will form a Bearish Engulfing, further expanding bearish momentum.

Overall, Nasdaq is bearish short- and mid-term. It remains bullish on the monthly frame until reversed.

Semiconductor Impact

If our projected 45–60% decline in SOX continues to unfold, the impact on Nasdaq could be substantial. Semiconductor companies represent roughly 30% of the index, meaning the direct mechanical drag alone could translate into approximately 13.5–18% downside pressure on Nasdaq, before any second-order effects are considered.

This is not just a sector issue. Semiconductors have been one of the core leadership groups of the entire market, and when leadership breaks, the damage rarely remains isolated. A major decline in SOX would likely pressure mega-cap technology, growth multiples, volatility, and broader investor sentiment. In other words, the direct math is already serious, but the real-market impact could be larger.

The S&P 500 would also be exposed, though to a lesser degree. With semiconductor-related names representing roughly 15% of the index, a 45–60% decline in SOX would imply a direct drag of approximately 7–9% on SPX. Again, this excludes broader contagion from weakening technology leadership and risk appetite.

This is why the semiconductor setup is critical for the Nasdaq outlook. If SOX continues to follow the projected path, Nasdaq could face a meaningful correction even without a full broad-market breakdown. If second-order effects expand, the pressure could become much more significant.

Elliott Waves

Short Term

Nasdaq has completed an impulse up, almost reaching the target zone, and then reacted lower in an impulsive fashion. Our main focus now is how the impulse down develops.

On Friday, NQ possibly developed wave iii of (iii). Technicals point to at least one more lower low before the wave can be considered complete. If the wave develops approximately as charted in blue, it would likely be treated as only wave A, about 10% off the top, of a much larger correction.

If this is an (abc) correction in red, we cannot estimate a potential reversal level at this moment and would have to rely on technical signals.

SUMMARY

Nasdaq’s Friday selloff was technically significant. In one session, the majority of daily indicators flipped bearish, strong bearish signals reached the 9-day frame, and momentum increased meaningfully. The next key checkpoint is the 10-day closure on Tuesday; if Nasdaq does not reverse by then, a Bearish Engulfing on the 10D frame would further expand downside pressure.

From an Elliott Wave perspective, Nasdaq appears to have completed an impulse up, nearly reached the target zone, and then reacted lower in an impulsive fashion. On Friday, NQ may have developed wave iii of (iii), with technicals pointing to at least one more lower low before the wave is complete.

Semiconductors remain a major risk amplifier. If SOX follows the projected 45–60% decline, and semiconductor companies represent roughly 30% of Nasdaq, the direct mechanical drag alone could translate into approximately 13.5–18% downside pressure on the index. The real impact could be larger if weakness spreads through mega-cap technology, growth multiples, volatility, and broader risk appetite.

The key question now is how this impulse down develops. If the blue path plays out, the current decline could be only wave A of a much larger correction, roughly 10% off the top. If the red abc correction is developing instead, the reversal level cannot be estimated yet and will need to be confirmed by technical signals. Overall, Nasdaq is bearish short- and mid-term, while the monthly remains bullish until reversed.