Elliott Wave 5.0 "Reboot"

Monday, February 8, 2016

Mini Nasdaq 100 New Bear Market Low

The Nasdaq has plunged again this morning, and created a new bearish low at the same time.  I counted this decline as a diagonal impulse and not as a true impulse, as there are huge differences between the two types of waves and their results.   Yes, it can still go lower and hit the bottom trend line, but there is no law or that says they have to get hit.  Diagonals can end up being short as they plunge to new lows with a 3 wave structure.  We are still short a few hundred points or less from entering into a conventional bear market of a 20% decline.  

Elliott waves can travel much further than that in a 4th wave correction as I have always used 40%. All this depends on the degree we are in and if we use net or gross numbers. 

With this chart the Nasdaq 100 hit its highest point on December 2 2015 and has only looked back briefly before resuming its trend.

I would like this to come to an end and end soon and start a trend back up but that may be wishful thinking. If the bearish leg is to continue a counter rally would only take this market back up to my 4th wave peak before it resumed its trip south one more time. 

 Any market move far past my top trend line will help confirm my short term bullish picture.

We only have about 900-1000 points to go and the Nasdaq 100 would create a new bullish record high.  Reversals can be very violent as all the protective buy stops get hit. 

Gold has responded to this stock decline as investors run to gold out of fear.