There may be a lot of choppy price action at the top of this trading range until price definitively starts to trend down to facilitate the correction or break out to make new highs. The reason for speculation that Nasdaq may be due for a correction is based on the current impulsive wave’s similarity to the previous impulsive wave in both price and time.
If the current impulsive wave has reached exhaustion it will be an approximate measured move of the previous impulsive wave with increase factors of:
- 1.022 increase in price range (10,365÷10,142)
- 1.046 increase in days to climax (637÷609)
If the upcoming correction is also a measured move of the previous correction, using the calculated increase factors, the correction should be projected to occur over approximately 340 days (325×1.046) and decline by approximately 6,483 Points (6,344×1.022).
This would bring price to 14,309 (20,792-6,483) around the date of June 16, 2025, which would also bring price back to the trend line.
The projected correction, based the listed calculations, may retrace 77 Points below the 61.8% level (14,386-14,309). It is also worth mentioning that the previous correction retraced 76 Points below the 61.8% level (10,503-10,427). This difference in retracement below 61.8% is a factor increase of 1.013 (77÷76).
On the monthly timeframe, technical indicators such as Stochastic and RSI show price as overbought.
2 Likes
I’m cautious about calling the projected correction a reversal point where price may bounce from the trend line, but that point does line up with an unmitigated demand zone.
2 Likes
Nice analysis! 
My analysis is that a major driving force of the latest up leg has been the strong USD, drawing in more foreign capital than usual from foreign investors looking to protect their portfolios from their own depreciating currencies. Roughly 30% of the capital invested in US stocks is foreign capital, fairly substantial.
With money markets now pricing in a Fed rate cutting cycle, the DXY looks to have made a long term / secular bearish shift. It is the only release valve for not only the pressure of US debts but also for the Japanese and the other G7 economies.
This will trigger capital flight out of US stocks/assets if the nominal gains don’t offset the losses from exchange rates + hedging costs. IMO, the odds are very high that this will be a reversal to a bearish market.
It’s fun to analyze but we can never be certain what will happen, let’s watch and see how it all unfolds. 
1 Like
Update:
Price moved up more than the original analysis (we can’t really pick the top), so I’m updating this based on the same formula in the event that this is the start of the correction.
If the current impulsive wave has reached exhaustion it could be an approximate measured move of the previous impulsive wave with increase factors of:
- 1.166 increase in price range (11,821÷10,142)
- 1.402 increase in days to climax (854÷609)
If the upcoming correction is also a measured move of the previous correction, using the calculated increase factors, the correction could be projected to occur over approximately 455 days (325×1.402) and decline by approximately 7,397 Points (6,344×1.166).
This would bring price to 14,851 (22,248-7,397) around the date of May 1, 2026, which would also bring price back to the trend line and possibly run liquidity under the trendline while tapping into a fresh monthly demand zone.
The projected correction, based on the listed calculations, may retrace 91 Points below the 61.8% level (14,942-14,851). The previous correction retraced 76 Points below the 61.8% level (10,503-10,427). This difference in retracement below 61.8% is a factor increase of 1.197 (91÷76).
Almost 6 months later (from October 18, 2024) and here we are…
I have a short bias so I always welcome a bear market, but I also have a heart and feel for people’s retirement funds that are tethered to the market.
Tariffs might be a catalyst but I still think the markets were due for a correction, no matter who won the presidency.
