Playing The NDX Like A Fiddle

By: Joseph Russo | Sat, May 24, 2008
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Before we illustrate our total command over the NDX of late, we wish to provide you with a brief update to our previous week's assessment of the Dow Transportation Average.

In brief, the update of the hourly Transportation average below exemplifies precisely how dynamic Elliott Wave architecture adjusts in accordance with real-time price action.

The hourly chart from a week ago noted prospects for an ending pattern to chop the Transports higher amid a suggested slowing in the rate of advance.

However, the fever-pitch reversal-high last Monday, and the pursuant downside carnage breaching the 5250 level by weeks-end - violated conformity to that ending pattern, forcing immediate adjustments to the unfolding wave count, and setting the stage for monitoring critical support above the 4800 mark.

All told, the wave structures (and alternate 3-wave peak) outlined below, reflect our latest assessment of the advance off the January lows.


Wednesday, 14-May:
Just three sessions before its print high of 2050.79, we continued to monitor a suspected ending diagonal pattern in progress from the start of the month. We wish to draw your attention to Wednesdays high of 2028 relative to our upside price target of 2050 boxed in green. Of added note, is what appeared to be a classic upside gap-closing 30-pt reversal day to end Wednesdays session at 1997.30 - leaving us over 52-points from our standing upside price objective for wave -v- to complete the pattern. If our analysis proved correct, we postulated that once wave -v- terminated, the NDX would fall like a stone toward the 1960 level.

Monday, 19-May
Following the anticipated high jinks surrounding Wednesdays "false" reversal day, we quickly narrowed the boundaries to our ending diagonal pattern. In doing so, this shifted the terminal of wave -iv- to Thursdays print low on 15-May as illustrated below. Following Mondays 2050.79 print high, another fever-pitch reversal took place into the close. After nailing the EXACT TOP within .79-cents, we calibrated an imminent downside price target of 1968 by Mondays close. On this date, we also added a projected "time" at which such a low would most likely occur. We conveyed this projection of "time and price" to members in our Monday Evening Post. The timing for this low was circled with a question mark, 4-days in advance for the 23-May, 27-May time period to deliver the NDX toward the 1960-level - with a firm target of 1968 cited.

Friday, 23-May
There is no better way to start a long Holiday weekend than with a stellar week of hard-earned trading profits! Elliott Wave Technology OWNED the NDX all week long, much like we take ownership of all the markets regularly covered in our publications. Perfection with this level of precision is rare, but does occur with a level of routine regularity, which obliterates chalking up such outstanding achievements to chance. By Wednesday 21-May, we had also added a downside price objective "window" which began at 1950. As illustrated below, we delivered the NDX to our readership on a silver platter. All of our downside price and time objectives arrived right on time.

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Joseph Russo

Author: Joseph Russo

Joseph Russo
Chief Editor and Technical Analyst
Elliott Wave Technology

Joseph Russo

Since the bubble, 911, and the 2002 market crash, Elliott Wave Technology's mission remains the delivery of valuable solutions-based services that empower clients to execute successful trading and investment decisions in all market environments.

Joe Russo is an entrepreneurial publisher and market analyst providing digital online media solutions designed to assist traders and investors in prudently and profitably navigating their exposure to the financial markets.

Since the official launch of his Elliott Wave Technology website in 2005, he has established an outstanding record of accomplishment, including but not limited to, ...

  • In 2005, he elicited a major long-term wealth producing nugget of guidance in suggesting strongly that members give serious consideration to apportioning 10%-20% of their net worth toward the physical acquisition of Gold (@ $400.) and Silver (@ $6.00).

  • In 2006, the (MTA) Market Technicians Association featured his article "Scaling Perceptions amid the Global Equity Boom" in their industry newsletter, "Technically Speaking."

  • On May 6 of 2007, five months prior to the market top in 2007, though still bullish at that time, he publicly warned long-term investors not to be fooled again, in "Bullish Like There's No Tomorrow."

  • On March 10 of 2008, with another 48% of downside remaining to the bottom of the great bear market of 2008-2009, in "V-for Vendetta," using the Wilshire 5000 as proxy, he publicly laid out the case for the depth and amplitude of the unfolding bear market, which marked terminal to a rather nice long-run in equity values.

  • Working extensively with EasyLanguage® programmer George Pruitt in 2010 and 2011, the author of "Building Winning Trading Systems with TradeStation," he assisted in the development of several proprietary trading systems.

  • On February 11, 2011, he publicly made available his call for a key bottom in the long bond at 117 '3/32. Within a year and half from his call, the long bond rallied in excess of 30% to new all time highs in July of 2012.

  • For the benefit of members and his general readership, he responded to widespread levels of economic and financial uncertainty in the development of Prudent Measures in 2012.

  • He publicly warned of a major top in Apple on October 26, 2012 in the very early stages of a 40% decline from its all time high.

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