The 06/16/22 and 06/23/22 blogs examined the possibility that US stocks could make a new decline bottom, within the 06/28/22 to 06/30/22 time zone.
The US stock market rally on 06/24/22 has reduced the chances of a bottom being made in the last week of June 2022.
The daily Nasdaq Composite chart (IXIC) courtesy of Trading View illustrates the action.
On 06/24/22 the IXIC – MACD indicator had a bullish lines crossover, the prior five crossovers since the IXIC all-time high have signaled rallies of at least a few trading days. The longest post crossover signal was on 03/16/22 – a nine trading day rally.
The most likely Elliott wave count for IXIC since its November 2021 peak is a developing five – wave impulse pattern. The rally from the 06/16/22 bottom is probably wave “4”. Fourth wave retracements in bullish or bearish impulse patterns are usually shallow. The reason is because after the termination of the third wave, the crowd recognizes the direction of the main trend – which in this case us down.
Normally, fourth waves retrace between .236 to .382 of the prior third wave. Retracements beyond .50 are rare. If the IXIC moves above 13,213.36 the presumed wave “4” would be in doubt.