The wave marking of the 4-hour chart of the NASDAQ-100 index still looks very convincing. At this time, according to the NASDAQ-100 index, three downward waves have been built. Thus, we can assume that the construction of the entire correction section of the trend is completed. If this is indeed the case, then the price increase will resume with targets located above the current wave 5. That is, the highs will be updated, and the index will continue to grow. However, not everything depends on the waves alone:
- The wave marking of the downward trend can acquire a more complex structure, for example, a-b-c-d-e.
- The mood of investors will be of great importance. After all, for the index to grow, more and more purchases of shares of companies are needed.
- The index can move for some time with the help of three-wave structures.
Thus, building a more global correction section of the a-b-c trend. Therefore, not everything is clear. An unsuccessful attempt to break through the 61.8% Fibonacci level led to the withdrawal of quotes from the lows reached.
On Thursday and Friday of last week, the leading US indices closed with strong growth. Thus, the demand for the stocks included in these indices has recovered after three very difficult days. Separately, it should be noted that quarantine measures in the United States continue to be weakened and even canceled. For example, vaccinated US citizens can no longer wear masks. Since the United States has one of the highest vaccination rates in the world, this is excellent news for the country and its economy. In particular, this means that the services and tourism sectors will continue to recover. It means that the shares of companies related to tourism, transportation, and services will continue to recover and grow in value. One of the outsiders was the shares of Tesla, whose CEO Elon Musk first announced the company's refusal to accept bitcoins as payment for electric cars, and then the project's suspension to expand the plant in Shanghai.
According to representatives of the company, this refusal is the complexity of relations between China and the United States. Shares of Apple and other technology companies rose in price. Overall, however, the US stock market still looks overly inflated. Let me remind you that the US authorities and the Federal Reserve have introduced a considerable amount of money into the economy over the past year. Not surprisingly, a particular portion of these trillions of dollars flowed into the stock market. We can say that the shares grew not due to natural demand but because there was more money. Many investors, fearing inflation, invested in stocks, bonds, cryptocurrencies, and anywhere else. When inflation began to accelerate, investors began to abandon the shares of companies that offer low dividend rates. The exception is the shares of companies that are constantly growing in the long run, where the size of the dividend is not essential.
Based on the analysis, I believe that the three-wave structure is complete. However, it can be transformed into a more complex set of waves. Therefore, I recommend not to rush to open new positions on the #NDX index. However, the wave marking of the instrument is still evident, so it will be possible to trade it in the near future.
