NASDAQ Worst Case C wave Scenario - Downside Target [500 word article FREE NO PAY NO EMAIL]

The NASDAQ’s gap down this morning was technically damaging and changes the short-term Elliott Wave structure in a meaningful way. Gaps that occur after a choppy corrective rally often signal that the market has transitioned from a B-wave bounce into the impulsive portion of a C-wave decline, and that is exactly what today’s price action suggests.

Coming into the session, the index was already struggling beneath key resistance from the prior fourth wave and the underside of the broken trend channel. The inability to reclaim that area left the rally overlapping and corrective in character. When a market opens with a downside gap from that kind of structure, it typically indicates that sellers are regaining control and that the next leg lower is underway rather than just a continuation of sideways consolidation.

From a wave perspective, the decline from the recent swing high appears to be unfolding as an ABC zigzag. Wave A established the initial impulsive move down into the 22,500 region, followed by a choppy and overlapping wave B retracement that failed to reach the 0.618 resistance zone—another bearish tell. That weak B wave set the stage for a C wave that should travel in five waves and at minimum match the length of wave A.

That brings the 22,500 level into sharp focus. It has acted as a pivotal support zone multiple times and also aligns closely with the 0.618 retracement of the prior rally. If the NASDAQ closes decisively below 22,500, it would confirm that wave C is extending and that the market has lost its last meaningful structural support from the previous base.

Using an A = C projection, the measured move targets the 21,750–21,800 region. This area is not just a Fibonacci equality target; it also coincides with prior consolidation from earlier in the move and the lower boundary of the broader corrective channel. That confluence makes it the most logical downside objective for the completion of the zigzag.

Internally, momentum is already expanding to the downside, which is what you would expect to see in the early stages of a C wave. Unlike wave A, which often begins with hesitation, wave C tends to accelerate as stops are triggered and late longs exit positions. The gap lower increases the probability that we are only in wave 1 or 2 of C rather than near its end, implying additional downside before a tradable bottom forms.

However, this bearish scenario is contingent on follow-through. If the NASDAQ were to reclaim the gap and push back above the broken support zone, it would suggest the move was a bear trap rather than the start of an impulsive leg lower. In that case, the market could transition back into a larger sideways correction instead of a full equality C wave.

For now, the technical damage favors the bears. A sustained close below 22,500 would confirm the breakdown and open the path toward the 21,750–21,800 target zone. That level should be watched closely for signs of capitulation, positive divergence, and a completed five-wave structure, which would signal that the corrective phase is ending and that a larger impulsive rally—potentially a new wave 1—could begin.

Until that support zone is reached and a clear reversal pattern develops, rallies are likely to be corrective and sold into, consistent with an active C-wave decline.