NASDAQ 100: Failed bull or fake bear? The decision is near

Closelook@US Stock Markets

The NASDAQ 100 bulls regained control again this week. Better-than-expected third-quarter earnings, a war in the Middle East that has not yet fully escalated, and a robust economy (the Godot recession does not materialize) drove the market higher at the beginning of the week.

Two channels hold - the consolidation channel and the bull one

The consolidation channel formed since the end of July has remained intact and could not be broken to the upside. The bulls tried for a second time but failed as of writing this analysis (pre-market 18 October).

The consolidation channel formed since the end of July has not been broken to the upside.

The bears could not build on the downside momentum

But the bears could not build on the downside momentum from late last week either. It must be noted that the steep upward channel formed since the beginning of 2023 was broken in October. The more moderate bull channel, though, is still untouched.

The steep upward trend was broken in October.

The bullish 5-wave count

I still stick with the bullish 5-wave count and think we are in a consolidation wave 4. We are either in Wave E, moving the market down to the lower trend channel line, or in the early stages of the final impulse Wave 5.

It's a draw still!

Let's call it a draw.

Looking at a shorter time interval, we can see that we have made three waves up since late September. We are now either in the first leg of Wave E or the fourth Wave of the initial Wave up, which is the start of the impulse Wave 5.

Mag-7 earnings will decide the fate of the bull.