No Parallel

When an Elliott analyst looks at a longer term monthly logarithmic scale chart of the NASDAQ 100 futures (NQ) from the 2009 low, there are a couple of things that stand out like a sore thumb. Let's see if you agree. With between 134 and 140 candles on it - depending on where you see the 2009 low - here is the chart.

NQ Futures - Monthly x((1))

First, just from a visual standpoint, you will note that there has been no wave that has come down to touch the lower parallel trend line! This is truly astonishing - as we see that phenomenon on charts from 5-minutes, to hourly, to daily and even weekly. Now ask yourself, for a moment, why don't we see it here?

Next, take some time to plot this chart and experiment with drawing 0 - 2 trend lines. There are only a couple of places where they will not cut off the next wave up. The location we have drawn is one of them.

So now, let's use the symbol ((1)) to mean circle-1 or Primary-1 in terms of wave degree. If we use the 0 - 2 trend line shown as a guide, it suggests that the entire structure is one with the "extended first wave". Why? Because wave ((4)) has already cut off the line from 0 - 2. In this case, the third wave would be on the peak of the Elliott Wave Oscillator, and wave Primary ((5)) is on a divergence.

Without touching the lower channel line is this another one of those "waves in a wedge"? No, not a diagonal, but an impulse with the extended first wave? Such waves often form wedge shapes.

Yet there is something else going on, too. If you look at the first two candles in the year 2020, they appear very much like only a three-wave sequence at this scale - and they are so short in time compared to the whole prior wave. So, IF we have finished an impulse (in this index), is it possible that prices in this index will eventually go 'over the top'? Well, let's look at another chart.

NQ Futures - Daily - 90 Percent Attained

Here you can see on the NQ daily futures chart - regardless of the current wave count, price has, indeed, reached the 90% level, qualifying this wave for the (B) wave of yet another flat (or triangle) without bending any rules or guidelines. So, we know about (B) waves, right? They can reach 90%, they can reach 100%, they can reach 138% (or even more, right?).

So, while this review does not make me more bullish at this time, it does suggest that if there is a significant pull-back to gain some fuel, that it might well be possible for price to make it over the top.

This does not have to occur in other indexes - like the S&P500 - which has a separate count. It doesn't even have to happen in the NQ. However, in the NQ, the Elliott wave structures do appear to be present to support such a count, if it does.

Have an excellent rest of the long weekend.

TraderJoe