10:58AM ET - NASDAQ downside 1.618 target almost reached..time for upward 4 min [500 word article]
NASDAQ Finds Support After Completing a 1.618 Third Wave Decline
From the top of the double B wave near 23,700, NASDAQ unfolded exactly the kind of downside structure Elliott Wave practitioners look for when a corrective rally has run its course. What followed was a clean five-wave decline, with momentum and breadth confirming that the move was not just noise, but a true third wave lower.
Once price rejected the 23,700 region, Wave 1 down established the initial direction change, followed by a brief and shallow Wave 2 retracement. From there, downside acceleration picked up sharply, signaling the start of Wave 3, the most powerful wave in any impulse sequence. Volume expanded, downside velocity increased, and intraday support levels failed rapidly—classic third-wave behavior.
Using Fibonacci projections, a 1.618 extension of Wave 1 targeted the 22,450 zone as a potential floor. This level was not arbitrary. It aligned with prior structural support, intraday demand from earlier sessions, and a measured move objective consistent with a textbook third wave. Importantly, the actual low printed at 22,461, just 11 points above the ideal Fibonacci target, reinforcing the precision of the wave count.
That type of accuracy strongly suggests that the heart of Wave 3 is complete, at least on an intraday or short-term basis. When markets reach Fibonacci-aligned targets during a third wave, the probability of a reflexive bounce increases dramatically. This is exactly what we saw: aggressive buying stepped in almost immediately, producing a sharp rebound off the lows.
From an Elliott Wave perspective, the bounce that followed should be treated as a Wave 4 retracement, not the start of a new impulsive uptrend. Wave 4s typically retrace .382 of Wave 3, often unfolding quickly and frustrating both late shorts and premature longs. In this case, the rebound carried NASDAQ strongly off the lows, pushing price back toward the .382 retracement zone and even threatening to turn positive by the close, depending on session timing.
This kind of snapback is typical after a completed third wave. Markets rarely move in straight lines, and Wave 4 corrections are designed to reset sentiment before one final push lower in Wave 5. As long as the rebound remains corrective—overlapping, choppy, and lacking strong upside follow-through—the larger structure still favors another leg down to complete the full five-wave sequence from 23,700.
Key resistance now sits near the 23,000–23,150 region, where any failure would keep the bearish near-term structure intact. Only a sustained reclaim of the prior breakdown levels would begin to challenge the current count.
In summary, NASDAQ respected a precise 1.618 third-wave target, found support exactly where it should, and delivered the expected reflexive bounce. The market did its job technically. The next move will determine whether this bounce is simply a Wave 4 pause—or the start of something larger. For now, the structure argues for patience and discipline, not chasing emotion in either direction.