Nasdaq and S&P 500 Looking To Test October Lows

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Nasdaq and S&P 500 Looking To Test October Lows

Written by John Rivera, Analyst at CFDtrading.com

CFDTrading.com provides free news, trading resources, and market analysis to the trading community.

Last week’s update was “today’s huge rally is the bulk of a 4th wave correction. Levels to watch for a top and reversal are 9672 and 10150. Price ideally remains below 10828.” Elliott channel resistance is at 10150 (61.8%) on October 23 and 9672 (50%) on November 6. This 4th wave correction that is underway now could take the form of a triangle, so expect range conditions over the next several weeks before the next bear leg takes hold.
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The Dow broke out from the recent triangle formation and is now looking to test the 10/10 low of 7,882. However, a reversal could signal that an upward trend is beginning as the lows to be higher than the prior.
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The S&P is virtually the same as the Dow. Expect a top and reversal near 1050 or 1107. Price remaining below 1200 keeps us confidently bearish. With regards to time, Elliott channel resistance intersects with the 50% retracement at 1050 on November 4.
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The S&P 500 like the Dow has broken lower from the triangle formation. A retest of the 10/10 low of 839 is possible. Again a reversal here could be the sign that a upward trendline is forming.

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The NASDAQ is facing potential resistance from the 38.2% of 2473-1543. A gap at 1905-1947 would be the next level of potential resistance. The gap is defended by the 50% level. Look for a top and reversal near the mentioned levels. Remaining below 2167 keeps the count presented above on track. The 50% and Elliott channel resistance intersect on November 4.
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The Nasdaq is looking to test the 10/10 low of 1,542 after gaping open yesterday. If support holds it could be the formation of a triple bottom and lead to an extended move higher. However, a break of support could see the tech laden index look to test the October 2002 low of 1,329.


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