Nasdaq – 100 and S&P – 500 Comparison

Of the three main US stock indices, S&P 500 (SPX) , Nasdaq Composite (IXIC), and  Dow Jones Industrial Average (DJI) – the Nasdaq Composite  has the deepest decline from its all – time high.

These are the comparative drops for each index :    DJI -4.5%

                                                                                      SPX -5.75%

                                                                                      IXIC – 12.5%

My 02/25/21 blog “Something Different is Happening” noted that IXIC had the strongest upside growth since the 10/30/20 bottom and had now become the leading index to the downside. IXIC  continues to lead the  journey down.

IXIC’s sub index, the Nasdaq 100 (NDX)  has decline 12% and as noted in my 02/28/21 post “Nasdaq 100 Intraday Chart”  has the clearest Elliott wave  pattern.

The NDX 30-minute chart courtesy of Trading View updates its intraday pattern.

Note the drop from the supposed Minuette wave (ii) has been  steady and smooth – the signature of a market moving in its primary direction.  In the near term NDX is at an Elliott wave crossroads. Analysts need to be aware of alternate wave counts, in this situation NDX  may have completed a Single Zigzag correction (A-B-C).  If so, it implies more upside leading to a new all-time high.  We  may have  evidence in the next  few trading days that clarifies the wave count.

The 30- minute SPX chart illustrates a different pattern.

The SPX decline from its 02/16/21 all-time high has been choppy and erratic, the signature of a correction in a rising trend.  The bearish aspect of the decline is that the prior two strong moves up have been completely retraced.  Bear market rallies in the stock market are usually fast and sharp yet lack sustainability. The bulls sense value and buy with intensity but can’t maintain the move. 

The 10- minute Micro S&P- E- Mini chart (MESH2021) courtesy of Ninja Trader illustrates potential resistance.

Market Profile methodology shows where trading volume is relative to price levels.  Market are either moving towards volume clusters or moving away from volume clusters.

The greatest volume cluster is called Point of Control (POC) and usually acts as support/resistance.  If there’s a breakthrough the move could be significant.  Note that on 03/05/21 MESH2021 broke through the 3/04/21 POC at 3809.25. The subsequent rally went to just above the 03/03/21 POC and then declined.  The powerful 03/05/21 rally may have terminated near the end of the session at POC resistance.     

A  move above secondary POC at 3855.50 on 03/08/21 implies most if not all of the action on 03/08/21 could be bullish.

A  failure to break above 3855.50 implies downside action for at least the 03/08/21 session.

A  break below the 03/04/21 bottom  could trigger a  powerful downside move.  

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

2 thoughts on “Nasdaq – 100 and S&P – 500 Comparison

  1. I found this incredibly useful and insightful. Can I ask about the alternative count for Nas100. If it is not a correctional ABC before a new all time high, then how would you expect it to play out.
    I will be watching out for 3855 on S&P with interest!!

    Sent from my iPhone

    Like

    1. Hi Sam
      Good question. There are two alternate counts. The other count has the rally on 03/05/21 as a wave “4” up of a larger five wave declining impulse pattern. This count is implies a major NDX top in place except near-term a slower developing bear market.

      As of the close of trading 03/05/21 its impossible to say which count is correct or how it could play out. The early action of trading on 03/08/21 is very important, particularly for the SPX. Watch the SP futures prices just prior to the SPX open 9:30 AM – ET on 3/08/21. If they are trading above the March 2021 price of 3855.50 it will probably be a bullish day for US stocks.

      A move below the SPX, or SP futures 03/04/21 bottom in the next one to three trading days could be very bearish.

      Mark

      Like

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