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Status of NASDAQ-100 Index (March 2020)

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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:

  1. 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.
  1. 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.
  1. 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.
  1. 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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