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I think we are at an interesting and critical juncture, with several indicators / patterns pointing to an upside reversal for the Nasdaq Comp:
1. From mid-July top to November low, a 5-waves Elliott could be counted, which respects the rules of alternating a zig-zag retace for wave 2 (in this case) and a flat W4 retrace.
2. This count is reinforced by the fact that we now have a beautiful bullish divergence with all indicators between the W3 low in October and the W5 low in November
3. Further reinforced by the Bollinger Bands squeeze: a close below the lower band just after a squeeze of the bands, with a (false) breakout of the October low, and the fact that this downthrust below the band is not broken within the next 3-4 days
4. All this Elliott impulse is contained in a down-hedging triangle, where the slope of the upper line is steeper than the slope of the bottom line, which indicates a weakening bearish power.
So, I expect a breakout to the upside soon.
Of course, this is only my humble opinion and all that could prove to be wrong if the index continues below 2800...
Best wishes
Carl Vanhaesendonck
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