The recent gyrations could have ended a small ending diagonal, but unless it breaks down hard below yesterdays low, then there is the possibility of seeing a minor new high for an alternative ending diagonal idea I am watching.

If the current move is a variation of an ending diagonal, then I suspect its close to or has ended a 5th wave of a larger impulse wave from the Aug 2017 lows. Once the trend from the Aug 2017 lows has ended, things should start to get more volatile for both the YM and INDU. The SPX has a very similar pattern and the analysis is essentially the same with a few slight differences between the wave counts.

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Yesterdays heavy decline appears to be very impulsive, the strength of the move is more fitting with an impulse wave (5 wave decline) and in particular the decline from the BOE news is a “3rd of 3rd” wave. A minor new low is still needed to complete 5 waves from 13319, any subsequent bounce in 3 waves thereafter would offer a setup to sell whilst it remains below 13319.

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The relentless trend from the Feb 2016 could be close to a pause on some tech markets. Particularly the NDX and COMPQ. Both markets can suggest the trend is close to ending either wave [3] or wave [5] from the Feb 2016 lows. Personally I think the better idea is to suggest its close to ending wave [3]. Although I can see the merits of the other idea when I look at a weekly chart, it can clearly be counted as a 9 swing move from the Feb 2016 lows.

If tech stocks are about to decline, then I think its close to a reversal. If you own some of the momentum tech stocks you may want to tighten up those stops.

The alternative idea I am watching, is that its also possible to count it as the end to wave [5], so essentially its the end to the whole move from Feb 2016. However without any serous downside below 5800, I will give the bulls the benefit of doubt and suggest its close to ending wave [3] and setting up for a decline towards 6000 for wave [4]. If the COMPQ declines as I suspect it will, then expect the SOX and NDX to follow.

The NDX is virtually the same as the COMPQ. Whilst I dont track the COMPQ much, I do track the NDX daily. So we have two wave counts that can make a solid case of a decline setting up. One idea suggests a move towards 6000, the other idea suggests a more significant decline below 6000.

The last time I felt this confident was in 2015 and we all saw the result of that setup https://www.wavepatterntraders.com/elliott-wave-analysis-of-compq/

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New highs on this stock need to be watch very carefully if you own this stock as I suspect it can potentially end a large impulse wave (5 wave advance) from the Aug 2015 lows. The prior spike was a thrust from a triangle, at the tiem I fel that it was missing a 4th and 5th wave.

Before

After

Fast forward and we now have that, a new high is still favored for wave [5], so I would lift your stops to 31.00 as then next all time high could be be a important high and one that you may regret not taking the cash when you had the chance to .

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