Wave Principle Prediction

Using the Elliott Wave Principle, we estimated that the NASDAQ 100 (NDX) would reach a peak near 26700. This target was based on observed wave patterns, with a short-term target of about 26500 ± 250. The index peaked at 25827 during orange Wave-3, dropped to 25504 for orange W-4, and then reached another peak of 25835 for orange W-5. Currently, the index is at 24780, which is lower than several warning levels, and it hasn’t hit our target zone. The peak at 25835 is now seen as gray W-i within a larger 5th wave. We are now targeting around 24600. Despite the recent all-time high in the Advance/Declining line (NYAD), signifying a non-bear market, if the index stays above the November 21 low of 23854, it could rise to over 28000 by April 2026. We predict that the market will reach a peak in late April 2028, influenced by midterm election year trends and the Armstrong Pi-cycle. Previous forecasts warned of downturns, like the 37% bear market in 2022. If the November 21 low holds, we expect the Bull market to continue into next year. A drop below this low could signal the beginning of a bear market. We have revised our outlook for the NASDAQ 100 because the expected rally to the 26500 zone didn’t materialize. After peaking at 25835, the index has fallen to around 24780, going below several short-term support levels. We now interpret this decline as a corrective wave, ideally targeting near 24600.

Market Volatility And Strategy

For traders using derivatives, this creates a clear opportunity based on key levels. Recent market volatility has increased, with the VIX rising to 19 this week. Selling cash-secured puts or put credit spreads with strike prices below 24500 could be an interesting strategy for those who believe the correction will be short-lived. This method allows traders to collect premiums while waiting for the market to stabilize. The most important level to watch is the November 21 low of 23854. If this level is decisively broken, it could indicate a more severe downturn, possibly marking the start of a new bear market. Traders might want to consider buying puts or setting up bear put spreads as a hedge or speculative move if the index approaches this support and fails to hold it. This market uncertainty coincides with new economic data raising concerns for 2026. The November 2025 Consumer Price Index report was 3.1%, slightly higher than expected. This has led some to doubt whether the Federal Reserve can maintain its current accommodative stance. Despite this, we are still in a period of overall market strength, highlighted by the Advance/Decline line reaching a new all-time high. However, these inflation worries are impacting market sentiment. If the 23854 low holds, we could see a major rally next year, potentially targeting over 28000 by late April 2026. This timing matches historical patterns associated with midterm election years and cyclical models that have previously identified significant turning points, including the late 2021 peak before the 2022 bear market. The next few weeks are crucial in determining if the bull market has one last surge ahead. Create your live VT Markets account and start trading now.

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