QQQ (Nasdaq) - Not painting a good picture. Throw over on weekly. If it doesn't reverse quickly, trouble lies ahead
Elliott Wave Analysis | QQQ CMP: 496 | Dt - 18th Nov'24
Simple Speak
Next week - EW count suggests a big red candle on the charts!
See the previous QQQ update where we highlighted the likelihood of a Throw Over pattern, what it means and its implications.
It seems the pattern has played out, making next week a critical period. If the Index doesn’t reclaim the recent highs quickly, significant decline could follow. Throw over patterns are rarely pleasant.
The good news, however, is that based on our EW count, Wave 4 is still ongoing and a subsequent Wave 5 rise is still expected. This suggests that while the drop might be meaningful, it’s unlikely to be catastrophic. However, if you’re holding weaker stocks, now might be a good time to prune your positions.
Chart Speak
Previous Update - 7th Nov
Elliott Wave Analysis | QQQ CMP: 505 | Dt - 7th Nov'24
What is a “Throw Under-Throw Over” combo?
In Elliott Wave Theory, a fifth wave approaching the upper trendline on declining volume suggests it may not break the line, whereas heavy volume indicates a potential "throw-over," where the wave exceeds the trendline briefly. This throw-over can be signaled by a prior "throw-under" in waves 4, followed by a swift reversal. Throw-overs complicate wave identification at smaller degrees, as they can cause smaller channels to be temporarily breached by the final wave. However, as long as the ending pattern is visible, this combo (even with some clutter) is a warning for violent reversal ahead.
Simple Speak
QQQ is currently in the final stages of an Ending Triangle pattern, with a reversal likely ahead!
Alternate Count – If the reversal doesn’t occur by early next week, we may need to publish an alternate wave count. However, at this point, we remain confident that this will not be necessary.
Chart Speak #1
Chart Speak #2
Previous update - 29th Oct’24
Elliott Wave Analysis | QQQ CMP: 495.4 | Dt - 29th Oct'24
Tl;dr - Our EW count for QQQ is still on track. Per which, QQQ, which has had an extended Wave 3 advance is currently in its Wave 4 corrective pattern. This pattern should see it test further lows in the ongoing A-B-C correction. It seems the week of Nov 4th is going to be critical for lot of stocks and the Index as well.
Simple speak
QQQ, which has had an extended run up since Nov’22 is now reaching a key level in the corrective pattern and the timelines seem to perfectly overlap with US elections.
This corrective pattern is EW Wave 4. Within this wave, Wave B is playing out in an Ending Triangle pattern and it appears to be in its last leg. With this a Wave C decline should commence, dragging the index lower.
Based on Elliott Wave count the odds are in favour of a correction over the next few weeks. Prices can drop to $420-$380 (~20-30% drop from the current levels)
Price may breakout above the pattern during the week of Elections, but it may end up being a “Bull Trap”. We should be careful!
Alternate count - Although it has a very low probability at this stage, the alternate count suggests the ABC correction has already ended and Wave 5 advance is underway.
Alternate count #1 - Wave 5 target is higher (2 or 3) and QQQ has some runway before it heads lower
Alternate count #2 - Wave 5 target 1 is met at $504 and then QQQ heads much lower
Chart speak #1 - Zoom in
Chart speak #2 - Zoom out
