The internet is responsible for many advancements in life. All of the encyclopedias that used to sit on the mantle of the fireplace at my childhood home are now a few mouse clicks away. Today’s youth don’t know how good they have it…..(dang it, I sound like my dad there, something I said I wouldn’t do when I grew up)…..

But there is a dark side to a plethora of information as well. How do you sift through all of this information to find a trusted source? There is the issue of “fake news”. Just like the title for this article – FAKE! But that is the problem – the internet allowed everyone to have a voice. I would not call all of them trustworthy. And yes, while letting people express their opinions is good to some extent, I personally feel that there are just “too many voices” on issues.

Each person has to decide for themselves who they feel are “trusted” media sources, something not a lot of people are capable of or even want to do…

The Market Is Crashing!

Let’s start by forgetting about a market “crash”. The market is not and will not be “crashing”. At least not yet. But a move to the 6,200 level that I discussed before in previous updates sure will feel like the market is crashing. But the other possibility I talked about

This first chart is a 3 month daily candlestick chart for the NASDAQ Composite to monitor its attempted rebound. The NASDAQ formed a Doji candlestick pattern after reaching the lower gap-down. The NASDAQ could have started its push down to the 6,200 level with Friday’s sell off.

But I think the index could have one last push upwards towards the upper gap-down area. The upper gap-down area is around the 7,400 – 7,500 price level. The sell-off that started Friday should end no later than Tuesday morning if the last push towards the 7,400 – 7,500 price level is going to play out. The goal during the rebound we are monitoring is to try and sell as near the previous high as we can if you do decide to sell. I think holding for a push towards the upper gap-down is the way to do that in this scenario. It is not wrong to start taking profits and raising cash at the lower gap-down though.

Yes, holding is still an option too. Especially for those than don’t like to trade a lot. At least during this correction. Why? Because according to the Elliott wave structure, the market will still see another new all-time high.

Holding may not be a viable option for the next correction. But we will deal with that when it comes. We need to focus on the here and now, sort of….

So how would we know if a move to the 6,200 level is still in the cards? A move to the 6,200 price level would be confirmed by a[s2If !current_user_can(access_s2member_level1)]….

If you want to continue reading this article for the NASDAQ Composite, you must first login.

 

If you are not a Trendy Stock Charts member, consider joining today! There are several different subscription plans available.[/s2If][s2If current_user_can(access_s2member_level1)] break below the start of the rebound area around the 6,800 price level. That doesn’t give you much time to react. And even then, the trip to the 6,200 price level could be cut short. Remember, there are 2 possible corrections we are monitoring now for the NASDAQ.

Correction #1

An Expanded Flat wave pattern is the chart pattern that would bring the NASDAQ to the 6,200 price level. Now that I have 3 possible anchor points I placed the red Fibonacci Extension Tool on the chart to calculate potential downside price targets. The 61.8%, 100% and the 161.8% Target Lines are the price targets to monitor. The 6,200 price level I mentioned previously falls right in-between the 100% and 161.8% Target Lines from the tool. The 6,200 price level, up to the 161.8% Target Line, would be the target price area if the Expanded Flat wave pattern does develop.

The open gap-up at the 6,000 level and also the 616.8% Target Line area should provide extremely heavy buying activity should the NASDAQ’s price action bring it down there.

However, corrections #2 & 3 involve shallower pullbacks and are

Correction #2

Correction #2 would involve the NASDAQ finding support at the other two price targets from the Fibonacci Extension Tool, the 61.8% Target Line and the 100% Target Line. Support at the 61.8% Target Line will lead to the development of a Running Triangle wave pattern which I mentioned in the Idea Chamber as another alternative for the NASDAQ’s correction. If the Running Triangle wave pattern is going to play out, I would anticipate a continue push towards next week towards the upper gap-down to happen as I discussed above.

The push towards the upper gap-down on the NASDAQ’s chart would most likely represent Wave D on the Running Triangle wave pattern. The formation of Wave D could even take up to 2-3 more weeks to fully develop when I look at it on the NASDAQ’s weekly chart. However after Wave E the market will see a breakout and a new Bullish Impulse wave pattern will develop.

Summary

So if you are a long-term investor and want to avoid capital gains for right now, holding through the NASDAQ’s correction is still an option at this point. Especially if you do not look at trades on a daily or weekly basis. But for the more active traders and investors, consider locking in gains early in the week and then wait to see if Wave E of the Running Triangle wave pattern develops or if the more nasty Wave C from the Expanded Flat wave patterns takes shape.

There is another “bullish” option for the market that involves it making new highs. And I have bullish in quotes because it is not really a bullish scenario at all. Making new highs on a series of Zig-Zag wave patterns, like the market did in February, is a possible sign the uptrend is nearing an end. This is something I have been keenly monitoring and will provide updates as I think they are necessary. Statistically though I think we need to monitor for the Expanded Flat or Triangle wave patterns.

I am going to be looking at individual charts most of the day and will start posting updates later tonight or tomorrow morning. Leave any specific requests for stocks in the Idea Chamber as I still have not fixed the comments. Leaving comments on articles does not work right now after I switched the website over to HTTPS. Something I have not have time to look into yet…

[/s2If]