Excerpt from: “Crystal Ball for Investing and Trading” Book.
Status of NASDAQ-100 Index (March 2020)
The NASDAQ-100 index represents the 100 highest capitalization, mostly high-tech companies, which are traded on the NASDAQ Exchange. NASDAQ-100 is much more de-correlated from the Dow Jones than the S&P-500. Therefore, detailed analyzes of NASDAQ-100 are more interesting.
Figure 13.18 shows a 9-day chart of NASDAQ-100, called NDX—X in TC2000, from 1988 to March 20, 2020.
Figure 13.18 – charts courtesy of TC2000.com
The following points are worthwhile highlighting:
- Unlike DJ-30, NDX—X has taken a pattern of zigzag with three subwaves A, B, and C. Its subwave A, bearish, started on March 24, 2000 (so over two months later than DJ-30) with an all-time high price of 4,816.35 to bottom with a price of 795 on October 8, 2002. This represents a loss of 83.5% from its top. Its subwave B, bullish, started on October 8, 2002 to reach an all-time high price of 9,736 on February 19, 2020.
- NDX—X achieved again the price levels of 2000 in December 2016 and broke firmly through the horizontal resistance line in January 2017. It has fully profited from the so-called Trump rally.
- Its subwave C, bearish, equivalent to subwave E of Dow Jones, started on February 20, 2020. With high level of probability, subwave C should bring the NASDAQ-100 down to the level of approximately 800. Nevertheless, a deeper bottom of around 200 points on November 9, 2020 (or October 21, 2021) cannot be excluded.
- The pattern of correction from 2000 to 2022 is predicted to be a zigzag because its subwave A shows a motive impulse pattern at one degree lower.
The trend reversal should take the pattern of a head and shoulders where the right shoulder would be around the price level of 4,450, the same as the left shoulder.
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