Regarding the horizontal lines, black lines represent strong support/resistance, while dark red lines mark very strong support/resistance.
Elliott Wave counts are meant to provide context. Each colored count represents the most probable paths given the current price data. There is a pattern unfolding in real-time, one of which will play out. By monitoring price levels that are held/broken, it will help us figure out which one is in play, so that we can better manage risk.
Nvidia (NVDA)
Nvidia appears to be setting up for one more high into the $1050 – $1200 range. Note the pattern from the high is a clear 3 wave move. This looks corrective, which suggests the larger uptrend isn’t over. This is accompanied with the composite index making a lower low, while price is making a higher low. This tends to happen in on-going uptrends.
Below $880 will be the first warning to the bullish case, but this drop can really go as low as $785 and still hold the pattern that would take us higher. As long as any further weakness holds above $785, I still expect to see another high. Below $785 and the top is in, which would have us shift toward setting up buy targets.
Bitcoin (BTCUSD)
While many alt-coins saw a big sell-off over the weekend, which altered their counts, Bitcoin has yet to test even the upper support for this minor 4th wave pullback. So far, it appears that we are in a bull flag, which still needs to chop around above $57,000 before completing. A break below $57,000 will be the first warning that something else might be playing out. However, as long as any additional weakness holds above $48,000, we are treating this as a buying opportunity. Below $48,000 and the larger uptrend pattern is at risk of invalidating.
Microsoft (MSFT)
MSFT is tracing a wedge pattern for the final 5th wave push. I keep going back and forth between the larger 5th wave being a standard 5 wave pattern or a large degree ending diagonal. Based on recent price action, I tend to favor the later. Regardless, both counts have MSFT potentially pushing higher for a final 5th wave swing. Below $397 and the odds favor a top being in. Below $365 and the top is in.
Broad Market Technical Analysis
Price Analysis
Last month, we took a deep dive into the long-term trends that appear to be approaching an inflection point. This analysis positioned the bull market that started in 2023 as part of a much greater bull market that started in 1933. For those that would like this context, please read the opening section in last month’s report here.
We are in a secular bull market, and when this bull run will end is an important question. There are 3 interpretations of the secular bull market that started in 2009.
If we zoom in on the 2022 top through today, we can get a better context on where the market is. These three scenarios are outlined below.
- Red Count – This count suggests that the secular bull market that started in 2009 ended in early 2022 for the S&P 500. This would make 2022 the (A) wave in the first corrective move down in a new secular bear market. This would then make 2023-2024 the (B) wave bounce, or a cyclical bull market within a larger secular bear market. How we will know this count is playing out is that the next larger drop will be a more direct, 5 wave pattern. This would mean that 2025 will be a sharp, and devastating drop for those not prepared, as we retrace all of the 2023 cyclical bull market and likely go beyond.
- Blue Count – This count has us in the final moves of a blow off top. This blow off top is the 5th wave of an ending diagonal pattern. Within a larger context, this ending diagonal pattern is the 5th wave of the bull market that started off the COVID low. How we will know this count is playing out instead of the red count is that the next larger drop should be a 3 wave pattern, followed by a final push for the bulls that will retrace most of the drop. This count will give us a ~10% trading range into 2025, before seeing the bigger drop.
- Green Count – This count has us halfway through with the final 5th wave in the secular bull market. If this is playing out, we will need to hold 4960 and then turn back higher in a direct move that is 5 waves. If this happens, and we break out to new highs, it will make this count a higher probability.
The major support regions 5080, 5055 and 4960. So far, we have taken out 2/3 of these supports, which builds the case for a top being in. We should see a bounce soon, the structure of which will be very important for what follows.
Advanced Market Signals Members receive in-depth technical analysis from our Portfolio Manager, Knox Ridley. Learn more here.here.
Recommended Reading: