Tuesday 10/08/2013 : Last Price: 3,150.75 : When we look at today’s NASDAQ chart on market close, we can see a sell off. As we mentioned Friday (see below), this is exactly the type of price action we were looking to see. It was possible to count 5-waves up to the chart high and it appears the decline has more to go. We advised in this space at 3,3205 to exit our long trading idea and with prices closing today at 3,150.75, we can see a nice 50 point move in our favor. Now what? It is possible to expect declines to continue into the span of the previous breakout area, to below 3,139.25 before thinking the descent is complete. True support is the low of the previous breakout range, possibly a triangle, that has thrust to the chart high and as we know, triangles are as 4th waves in an uptrend, which helped shape our forecasts that 5-waves up were nearing an end. As we move forward, look for a breach of 3,139.25 at minimum before looking for signs of a bottom.
Excerpt from The Elliott Wave Report (10/4)
The Nasdaq is close enough to 5 waves up to exit this trade idea.
We were and have been expecting a full 5-waves up from 3052.50 in the Nasdaq. We pointed to Micron as a potential leader and so far so good. (see below) again this week. A small 5-wave decline would alert some type of more lasting peak is in place, for shorting but we have been advising the long side, but this may be a good place to be on watch for a near-term top to form. Enough potential to count out a rough 5-wave advance and key levels intact, it would be good to exit this idea close to a hundred points higher than our breakout point. We have been following MU Micron Technology for a bellwether. It does not signal a top is in, but Nasdaq is close enough for this Weekly report.
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