NASDAQ Elliott Wave Update 12:47PM ET [500 word article FREE NO PAY NO EMAIL]
The NASDAQ staged an impressive initial rebound from 22,250 to 22,950, a roughly 700-point advance that carries the hallmarks of a developing wave 1 off a potential corrective low. The structure of that move was sharp, directional, and showed improving internal momentum—key traits that differentiate an impulsive rally from a mere counter-trend bounce. Following that advance, price has begun to retrace, and the current pullback is best interpreted as a wave 2 correctionahead of a possible third-wave expansion.
From an Elliott Wave perspective, the most important level to monitor is 22,500, which aligns closely with the .618 Fibonacci retracement of the 22,250 → 22,950 rally. The .618 retracement is the most common depth for a second wave, and holding that level would maintain the integrity of the bullish 1-2 setup. As long as the NASDAQ remains above 22,500 on a closing basis, the pullback can be considered corrective and constructive rather than destructive.
The character of the retracement also matters. A choppy, overlapping decline with contracting volume would reinforce the idea that this is a wave 2, while a sharp impulsive drop with expanding breadth to the downside would raise the risk that the market is forming a more complex correction or even retesting the lows. So far, the price action appears more consistent with a controlled pullback than a renewed impulsive selloff, which keeps the bullish scenario viable.
If 22,500 holds, the market is positioned for a wave 3 advance, which is typically the strongest and fastest portion of an Elliott Wave sequence. Third waves are characterized by expanding momentum, broad participation, and persistent upside pressure. In practical terms, that means once resistance breaks, pullbacks should become shallow and buyers should remain in control.
The key trigger level remains 22,800. This zone represents the upper boundary of the current consolidation and the pivot that separates a completed wave 2 from a still-developing corrective structure. A decisive break above 22,800—ideally with strong breadth and increasing volume—would confirm that wave 3 is underway. Such a move would invalidate most bearish alternate counts and open the door for a rapid push higher.
Upon clearing 22,800, the next logical upside target lies near 23,700, which corresponds to typical third-wave Fibonacci extensions and prior structural resistance. Given the size of the initial wave 1, a standard 1.618 extension projects into that region, making it a realistic short-term objective if momentum accelerates.
On the downside, the bullish count begins to weaken below 22,500 and becomes significantly damaged on a break back toward 22,250. A move under that low would negate the 1-2-3 setup and suggest that the larger corrective pattern is still unfolding, potentially in the form of a double zigzag or flat.
In summary, the NASDAQ is at a critical inflection point. The rally from 22,250 to 22,950 likely represents wave 1, and the current retracement is a textbook candidate for wave 2 as long as .618 support at 22,500 holds. The market now needs a decisive break above 22,800 to confirm a third wave higher and signal that a durable bottom is in place. If that breakout occurs, the path toward 23,700 becomes highly probable in the near term.