NASDAQ (NDX) – Where is it going?

In my previous post I indicated that NASDAQ could be making an ascending triangle if it breaks the upper trend channel that I marked. So it did. Now where is this going? Is it near the end?


Following is the chart of NASDAQ since Feb-1998 in log scale. NASDAQ had its biggest drop in Mar-2000 to Oct-2002. It reached as low as 795 points. In the 2008 drop it reached the low point at 1,019. This is not a new low. In the 2000 – 2002 drop we could label 5 waves down. This structure could be wave 1 of wave A or wave A itself. If this is wave 1 of wave A, we should have expected a sharp wave 2 retracement that should have retraced at least 50%. In the 2002 – 2008 bullish trends we saw less than 38.2% retracement also it has taken a lot of time to build. Therefore I think 2002 low was wave [A]. Since then we are in wave [B]. Oct-2007 high must be wave (A) of wave [B]. If you look at the bearish trend of NDX since Oct-2007, unlike S&P 500 (SPX) and DOW Johns Industrial Average (DJX) we could see only 3 waves down. SPX and DJX have 5 waves down. So Nov-2008 low of NDX could be wave (B) of wave [B]. If so, since Nov-2008, we are in wave C of wave (B).

 
This would explain why the stocks in NASDAQ are finding new highs compared to where they were in 2008. So trying to label wave 2 in NASDAQ as most Elliott Wave analysts does these days could be totally wrong. Any down trend in NASDAQ would be short lived. Major down trend in NASDAQ may not be coming any time soon. Also the RSI in the above monthly chart has not reached the overbought territory.
 
So where is it going? I think it is reaching towards the upper trend channel above 1,950 in the following 2 year daily chart.