Nasdaq 100: Testing the Structural Integrity of the Bull Market

The Nasdaq 100's rally from April is now being reinterpreted through a corrective lens. The initial impulse wave, which peaked at 25,835, is no longer seen as the completion of a major advance. Instead, it is being viewed as the start of a larger corrective phase. Specifically, the peak at 25,835 is now identified as the first wave (W-i) of a larger five-wave decline, with the next target set at an ideal level near 24,600.

This shift in perspective is driven by the index's failure to reach its prior projected target zone near 26,500. The rally's structure, once seen as a clean five-wave impulse, is now being adjusted to account for this shortfall. The current corrective wave (W-ii) is underway, and its path will determine the market's immediate trajectory.

The most critical level to watch is the November 21 low of 23,854. This level acts as a major psychological and technical support. A decisive break below it would strongly suggest that the broader bear market is already underway, invalidating the current corrective narrative. Traders are therefore watching this level with particular intensity, as it represents the line in the sand for the bull case.

An important positive divergence exists in the market's internals. While the index has failed to make new highs, the Advance/Declining line has made a new all-time high. This suggests that the breadth of the market is still expanding, which is a classic sign that a broad-based bear market is not yet developing. It provides a counterpoint to the index's technical weakness, indicating that the selling pressure may be concentrated in a few mega-cap stocks rather than pervasive across the board.

The bottom line is that the market is at a pivotal juncture. The wave structure has shifted to a corrective pattern, and the path forward hinges on the 23,854 level. If support holds, the path could still lead to a final surge toward 28,000 by late April 2026. A break below 23,854, however, would signal a more significant downturn is in play.

Forward Scenarios: The Path to 2026 and the 2028 Cycle

The Nasdaq 100's immediate trajectory hinges on a single, critical level. The market's current path is bifurcated, with two distinct scenarios emerging based on whether the November 21 low of 23,854 holds its ground.

The bullish scenario is straightforward. If the index can defend that support, the Elliott Wave analysis suggests the bull market is far from over. The structure would then allow for a final, subdividing 5th wave rally, with an ideal target of 28,000+ by approximately April 18-28, 2026. This timing is not arbitrary; it aligns with the powerful seasonal pattern of midterm election years, which historically peak in late April. The path higher would be a continuation of the rally that began in April, with the market completing a larger impulse wave.

The more bearish scenario is triggered by a break below that key 23,854 level. Such a move would strongly suggest the bear market is already underway, shifting the focus to the next major support zone. The first significant floor for a deeper correction lies between 21,550 and 22,840. This range represents the area where the market would likely retrace the entire 5th wave of the recent rally, pushing back to the low of the previous fourth wave. The structure of any decline from here would determine whether this is a sharp correction or the start of a more protracted downtrend.

Looking further out, a long-term cyclical model provides a potential horizon for the next major turning point. The Armstrong Pi-cycle, which has a track record of forecasting significant market tops, points to a potential peak around April 28, 2028. This date is notable for its alignment with the cycle's fixed mathematical structure and its historical accuracy in calling major corrections. While this model cannot predict every minor swing, its forecast for a 2028 top underscores the importance of monitoring the market's behavior over the next two years. The path from here to that distant peak will be defined by the battle for the 23,854 level and the momentum that follows.

Catalysts, Risks, and Strategic Implications

The immediate catalyst for the NASDAQ 100 is a decisive test of a critical technical level. The index has already broken below several warning levels, and the most important support to watch is the November 21 low at 23,854. A sustained break below this point would shift the risk/reward decisively toward the bearish scenario, potentially signaling the start of a more significant downturn. Conversely, if the market holds above this level, it could set up for a final, subdividing wave that targets 28,000+ by approximately April 18-28, 2026.

A key risk to the bullish scenario is the recent inflation data. The November Consumer Price Index report came in at 3.1%, slightly hotter than anticipated. This has created uncertainty about the Federal Reserve's policy path for 2026 and is weighing on market sentiment, adding a fundamental headwind to the technical setup.

This tension defines a clear strategic framework for the coming weeks. For traders betting the correction is temporary, selling options below 24,500 offers a premium collection opportunity. This approach, such as cash-secured puts or put credit spreads, allows for collecting income while waiting for the market to find its footing. The setup is particularly attractive given the recent rise in market volatility, with the VIX climbing to 19. On the flip side, if the index approaches the 23,854 support and fails to hold it, buying options becomes a necessary hedge or a speculative play to position for a deeper decline. The next few weeks are crucial in determining which path the market will take.