Here is my count of the correction so far in the Nasdaq. I don’t believe a full 5-wave downside structure is complete, which means, with only 3 waves finished, it might be dangerous to be heavily shorting as of yet. The last little move to the downside appeared to subdivide into just 3 waves, so I believe it was a wave B of an expanded flat. The downward momentum eased today, with the MACD on the 1-hour chart now showing considerable divergence. The next new low isn’t likely to be a deep one, but just a slight new low created by 5 waves down will confirm that a 5-wave pink A of a bearish ABC zigzag is complete. This will indicate that there is more downward movement to come.
As the chart depicts, a complete wave A (pink) should be followed by a pink wave B, likely a 3-wave retracement to about 2335, the extreme of the wave 4 of one lesser degree. At that point, I’ll be expecting very aggressive selling to commence, with an eventual downside target of around 2082 to complete pink wave C, and therefore, the blue wave 2 correction. The next movement after that, if my longer term prognosis is correct, may be more buying. Should be interesting!
For a look at my intermediate term, but tentative expectation for the Nasdaq, and the US stock market in general, see my earlier post: http://elliottwavepredictions.com/?p=21.