So, the NDX dropped below its March 14 low of 13,020 on Tuesday, which I did not expect to happen. Obviously, such as failure of support is not something you want to see happen if you are a bull, but the NDX is still slightly above 38.2% Fibonacci retracement of the rally from March 2020 – November 2021. That retracement level is 12,946. I still think there’s at least a fifty-fifty chance that the NDX will bottom out near that level.
As for the Dow, and the Three Peaks Domed House, I want to see what happens on the NDX before reassessing this.
I think that the Dow has completed the base of the Domed House and formed Point 14, given that there was a climactic selloff on Apr 22, followed by a rebound in the next trading session.
Now there is the matter of the projected duration remaining to the top of the domed house. The type of base that was just formed (Points 10-14) was an “ascending base.” Apparently, in the case of an ascending base, Lindsay thought that the count of 7 months and 8-10 days should begin from Point 10 rather than Point 14. This is something I just recently became aware of when reading the book George Lindsay and the Art of Technical Analysis by Ed Carlson (Page 61).
If we count 7 months and 8-10 days from Point 10 (Feb 24), the top of the domed house is projected for early-October.
Looking at the NASDAQ-100 (NDX):
The NDX has cut very deep into the rally off the March 14 low. I am very confident that the March 14 low will hold given that it represented a monster 22% correction from the all-time highs. The intraday reversal to the upside on Apr 25 makes it likely to me that there has been a successful retest of the correction low, and contributes to my assumption that the Dow has completed its base.
From an Elliott Wave standpoint, I think that the NDX’s correction during Nov 2021 – Mar 2022 was Primary Wave II of the bull market.
I think the Dow is currently in a drop to form Point 14 of the Three Peaks Domed House that I am tracking. I expect Point 14 to form in the range of Points 11-12 (32,578 – 34,179).
If, on the other hand, the Dow rallies from here above the March 29 high of 35,372, then I will consider Point 14 to have been on Apr 1.
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