The PowerShares QQQ (QQQ) is an exchange-traded fund (ETF) that tracks the Nasdaq 100 index, which is made up of the 100 largest non-financial companies listed on the Nasdaq Stock Exchange. On December 28, 2022, the QQQ hit a low of 313.99 and then began a rally in what is known as wave 1. This wave 1 ended at the same level as the low of 313.99.
Wave 2 is now in progress and is attempting to correct the wave 1 cycle in a larger degree 7 swing double three structure. Wave (a) ended at 302.22 and wave (b) ended at 311.03. Wave (c) extended lower towards 297.25 which completed wave ((w)) in a higher degree. Wave ((x)) ended at 310.41 with an internal subdivision of a double three in a lesser degree. Wave (w) ended at 308 and wave (x) ended at 300.91. Wave (y) then extended higher again towards 310.41 which completed wave ((x)).
Wave ((y)) lower is now in progress and is attempting to correct the cycle from December 28, 2022 low. The QQQ still needs to break below wave ((w)) at 297.25 in order to confirm this view. Wave i ended at 303.71 and wave ii ended at 309.21. As long as the pivot at 313.99 remains intact, the rally is expected to fail in 3, 7, or 11 swings and the QQQ will extend lower. The potential target for wave ((y)) lower is 100% – 161.8% Fibonacci extension at 283.29 – 293.65 where wave ((y)) should complete. This should end wave 2 and the QQQ should then find buyers from the blue box area for a 3 wave rally at least.
The chart above illustrates the 60 minutes hour Elliott Wave chart for the QQQ. The chart is showing the wave 1 rally and the wave 2 correction in the larger degree 7 swing double three structure. The video below provides a more detailed analysis of the Elliott Wave structure of the QQQ.
The Elliott Wave theory is a form of technical analysis that can be used to identify and predict the price movements of stocks, commodities, and other financial instruments. The theory is based on the idea that the price of a security moves in a series of waves, with each wave having two parts: an impulse wave and a corrective wave. The impulse wave moves in the direction of the trend, while the corrective wave moves against the trend.
The Elliott Wave theory can be used to identify the current wave count and to predict potential price targets. By understanding the wave count, traders can anticipate potential support and resistance levels and make better trading decisions.
The QQQ is a great example of how the Elliott Wave theory can be used to identify and predict price movements. By understanding the wave count, traders can anticipate potential support and resistance levels and make better trading decisions. The wave 2 correction is currently in progress and the QQQ still needs to break below wave ((w)) at 297.25 in order to confirm this view. The potential target for wave ((y)) lower is 100% – 161.8% Fibonacci extension at 283.29 – 293.65 where wave ((y)) should complete. This should end wave 2 and the QQQ should then find buyers from the blue box area for a 3 wave rally at least.
The Elliott Wave theory is a powerful tool for traders and investors to use in their analysis of the markets. By understanding the wave count, traders can anticipate potential support and resistance levels and make better trading decisions. The QQQ is a great example of how the Elliott Wave theory can be used to identify and predict price movements.
