gem-x's Elliott Wave Forecast: Feb 15 02
NASDAQ, today got to as high as 1877, which is the exact .618 Fibonacci retracement level of the move down from (Wave C) 1942 to 1772. Usually Wave 1's retrace and stop and pause at .618 of the Wave C of a zigzag , and so far that's what we got. This is the standard definition of a wave 1 move after a zigzag. But we never got the volume confirmation to completely verify it. After seeing the volume dry up around 11AM, I was expecting the correction of the move up from 1772 to unfold....the Fast Stochastic was sticking to 100, and it was not about to stay there too long..
I got stopped out in the morning, and took my profits from yesterday, profits on NVDA (4%) NTAP (17%) and OVER (12%), break even on BRCD at 33.38, and small losses of .50/1.00 on QLGC and EMLX...and when the NASDAQ dipped, I bought it. But at 1:50PM, I sat there with my ruler on the real time chart watching that NASDAQ channel, and than it broke, and whatever day trade I had planned in the morning I bailed on. Every time I've seen a 4-5 day upward or downward channel break, I close out whatever positions I have and wait, especially when I'm suspicious of the move, and if it's in potential 5 of 5. The put/call ratio got to .91, which officially makes the 10 day MA .85, and the 21 day MA at exactly .80, nosebleed levels. Regardless of what the VIX is at, the amount of puts that have been bought the past month is very large, and this week, the put/call ratio consistently averaged .80-.85+ with the market rising. Even during expiration and upmove
Tomorrow and the next couple days, is going to be the retest of the move from 1772 to 1877, especially after what we saw today...the NASDAQ had a bearish engulfing reversal candle on a bearish outside day. NASDAQ created a higher high than the previous day, and closes at a lower low. ....but the MACD fit within the upward channel, and is very close to going positive. It was positive at one point during the day, as was the NDX. The DOW's MACD is positive for the first time since late November(!), and the SPX is right on the edge of it.
So, the levels to watch tomorrow are: 1837 (.382 fibonacci retracement), 1824 (.500), 1812 (.618), and especially 1795 (.78). We cannot have a day that closes bad again, and to keep this uptrend going, the next move up, should this re-test pass, needs to have that big volume confirmation. The much preferred candlestick formation tomorrow are a hammer or piercing line reversal....but if there's a gap down, and a continuation down with a bad candle breaking 1795, this would be Wave 5 down, targeting 1730-1754....but we've clearly seen dip buying this week, and should the market rally strong off the test, perhaps more players will feel comfortable going long.
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