Nasdaq closed at 3213 on Tuesday, a new high after the collapse of the year 2000 dot-com bubble when Nasdaq plunged 77% from March 2000's high of 5048 to Sept 2002's low of 1139.
One possible wave count for Nasdaq is as shown below, assuming the uptrend since Sept 2002 is a mega B wave.
Since the completion of the major wave (2) on March 2009, Nasdaq has completed its wave 1, 2, 3, 4 and sub-wave (i), (ii), (iii) and (iv) and it is currently at the tail-end of its sub-wave (v) of its wave 5 of its major wave (3) of mega wave B as shown below.
Assuming Nasdaq is not able to break its upper trend-line, sub-wave (v) will stop at around 3250 level, another 37 points to go from Tuesday closing level of 3213.
Again, in view of the Federal Reserve QE programs and the liquidity created, sub-wave (v) may not be the end of wave 5, that is to say, wave 5 may have 9 sub-waves. The next pullback can be sub-wave (vi) to be followed by sub-wave (vii), (viii) and (ix).
Similarly the major wave (3) can have 9 waves too. After wave 5, it can also have wave 6, 7, 8 and 9.
So, after the completion of sub-wave (v), the monitoring will be on whether the next correction will stop at the lower trend-line at around 2900 level to form the sub-wave (vi).
If Nasdaq failed to hold at 2900 level and it continues to drop lower, we can draw the conclusion that wave 5 is completed. Then the next question is whether the bigger degree correction is wave 6 or the major wave (3) has ended.
Just has to wait and see.
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